Correlation Between Waste Management and Maximus
Can any of the company-specific risk be diversified away by investing in both Waste Management and Maximus 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 Waste Management and Maximus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Waste Management and Maximus, you can compare the effects of market volatilities on Waste Management and Maximus 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 Waste Management with a short position of Maximus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waste Management and Maximus.
Diversification Opportunities for Waste Management and Maximus
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Waste and Maximus is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Waste Management and Maximus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maximus and Waste Management 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 Waste Management are associated (or correlated) with Maximus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maximus has no effect on the direction of Waste Management i.e., Waste Management and Maximus go up and down completely randomly.
Pair Corralation between Waste Management and Maximus
Allowing for the 90-day total investment horizon Waste Management is expected to generate 0.77 times more return on investment than Maximus. However, Waste Management is 1.29 times less risky than Maximus. It trades about 0.11 of its potential returns per unit of risk. Maximus is currently generating about -0.02 per unit of risk. If you would invest 16,914 in Waste Management on August 26, 2024 and sell it today you would earn a total of 5,527 from holding Waste Management or generate 32.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Waste Management vs. Maximus
Performance |
| Timeline |
| Waste Management |
| Maximus |
Waste Management and Maximus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Waste Management and Maximus
The main advantage of trading using opposite Waste Management and Maximus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waste Management position performs unexpectedly, Maximus 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 Maximus will offset losses from the drop in Maximus' long position.| Waste Management vs. Genpact Limited | Waste Management vs. Broadridge Financial Solutions | Waste Management vs. First Advantage Corp | Waste Management vs. Franklin Covey |
| Maximus vs. Oneconnect Financial Technology | Maximus vs. Global Business Travel | Maximus vs. Alight Inc | Maximus vs. CS Disco LLC |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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