Correlation Between Veolia Environnement and Perma-Fix Environmental
Can any of the company-specific risk be diversified away by investing in both Veolia Environnement and Perma-Fix Environmental 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 Veolia Environnement and Perma-Fix Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Veolia Environnement SA and Perma Fix Environmental Services, you can compare the effects of market volatilities on Veolia Environnement and Perma-Fix Environmental 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 Veolia Environnement with a short position of Perma-Fix Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veolia Environnement and Perma-Fix Environmental.
Diversification Opportunities for Veolia Environnement and Perma-Fix Environmental
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Veolia and Perma-Fix is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Veolia Environnement SA and Perma Fix Environmental Servic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perma Fix Environmental and Veolia Environnement 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 Veolia Environnement SA are associated (or correlated) with Perma-Fix Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perma Fix Environmental has no effect on the direction of Veolia Environnement i.e., Veolia Environnement and Perma-Fix Environmental go up and down completely randomly.
Pair Corralation between Veolia Environnement and Perma-Fix Environmental
Assuming the 90 days trading horizon Veolia Environnement is expected to generate 6.61 times less return on investment than Perma-Fix Environmental. But when comparing it to its historical volatility, Veolia Environnement SA is 2.33 times less risky than Perma-Fix Environmental. It trades about 0.03 of its potential returns per unit of risk. Perma Fix Environmental Services is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 318.00 in Perma Fix Environmental Services on September 5, 2024 and sell it today you would earn a total of 962.00 from holding Perma Fix Environmental Services or generate 302.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Veolia Environnement SA vs. Perma Fix Environmental Servic
Performance |
| Timeline |
| Veolia Environnement |
| Perma Fix Environmental |
Veolia Environnement and Perma-Fix Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Veolia Environnement and Perma-Fix Environmental
The main advantage of trading using opposite Veolia Environnement and Perma-Fix Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veolia Environnement position performs unexpectedly, Perma-Fix Environmental 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 Perma-Fix Environmental will offset losses from the drop in Perma-Fix Environmental's long position.| Veolia Environnement vs. JAPAN AIRLINES | Veolia Environnement vs. BlueScope Steel Limited | Veolia Environnement vs. CosmoSteel Holdings Limited | Veolia Environnement vs. Cars Inc |
| Perma-Fix Environmental vs. Waste Management | Perma-Fix Environmental vs. Republic Services | Perma-Fix Environmental vs. Waste Connections | Perma-Fix Environmental vs. Veolia Environnement SA |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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