Correlation Between Stericycle and Veolia Environnement
Can any of the company-specific risk be diversified away by investing in both Stericycle and Veolia Environnement at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Stericycle and Veolia Environnement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stericycle and Veolia Environnement SA, you can compare the effects of market volatilities on Stericycle and Veolia Environnement and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Stericycle with a short position of Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stericycle and Veolia Environnement.
Diversification Opportunities for Stericycle and Veolia Environnement
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stericycle and Veolia is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Stericycle and Veolia Environnement SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement and Stericycle is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Stericycle are associated (or correlated) with Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of Stericycle i.e., Stericycle and Veolia Environnement go up and down completely randomly.
Pair Corralation between Stericycle and Veolia Environnement
Given the investment horizon of 90 days Stericycle is expected to generate 0.7 times more return on investment than Veolia Environnement. However, Stericycle is 1.42 times less risky than Veolia Environnement. It trades about 0.04 of its potential returns per unit of risk. Veolia Environnement SA is currently generating about -0.23 per unit of risk. If you would invest 7,820 in Stericycle on September 1, 2024 and sell it today you would earn a total of 30.00 from holding Stericycle or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 40.91% |
| Values | Daily Returns |
Stericycle vs. Veolia Environnement SA
Performance |
| Timeline |
| Stericycle |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Veolia Environnement |
Stericycle and Veolia Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stericycle and Veolia Environnement
The main advantage of trading using opposite Stericycle and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stericycle position performs unexpectedly, Veolia Environnement can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Veolia Environnement will offset losses from the drop in Veolia Environnement's long position.| Stericycle vs. Clean Harbors | Stericycle vs. Waste Connections | Stericycle vs. Casella Waste Systems | Stericycle vs. Montrose Environmental Grp |
| Veolia Environnement vs. Montrose Environmental Grp | Veolia Environnement vs. Clean Harbors | Veolia Environnement vs. Susglobal Energy Corp | Veolia Environnement vs. Republic Services |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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