Correlation Between Veolia Environnement and Casella Waste
Can any of the company-specific risk be diversified away by investing in both Veolia Environnement and Casella Waste 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 Casella Waste 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 Casella Waste Systems, you can compare the effects of market volatilities on Veolia Environnement and Casella Waste 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 Casella Waste. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veolia Environnement and Casella Waste.
Diversification Opportunities for Veolia Environnement and Casella Waste
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Veolia and Casella is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Veolia Environnement SA and Casella Waste Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casella Waste Systems 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 Casella Waste. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casella Waste Systems has no effect on the direction of Veolia Environnement i.e., Veolia Environnement and Casella Waste go up and down completely randomly.
Pair Corralation between Veolia Environnement and Casella Waste
Assuming the 90 days trading horizon Veolia Environnement SA is expected to under-perform the Casella Waste. But the stock apears to be less risky and, when comparing its historical volatility, Veolia Environnement SA is 1.25 times less risky than Casella Waste. The stock trades about -0.17 of its potential returns per unit of risk. The Casella Waste Systems is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 9,122 in Casella Waste Systems on September 2, 2024 and sell it today you would earn a total of 1,438 from holding Casella Waste Systems or generate 15.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Veolia Environnement SA vs. Casella Waste Systems
Performance |
| Timeline |
| Veolia Environnement |
| Casella Waste Systems |
Veolia Environnement and Casella Waste Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Veolia Environnement and Casella Waste
The main advantage of trading using opposite Veolia Environnement and Casella Waste positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veolia Environnement position performs unexpectedly, Casella Waste 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 Casella Waste will offset losses from the drop in Casella Waste's long position.| Veolia Environnement vs. Veolia Environnement SA | Veolia Environnement vs. Superior Plus Corp | Veolia Environnement vs. NMI Holdings | Veolia Environnement vs. Origin Agritech |
| Casella Waste vs. AXWAY SOFTWARE EO | Casella Waste vs. Take Two Interactive Software | Casella Waste vs. MAGIC SOFTWARE ENTR | Casella Waste vs. CyberArk Software |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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