Correlation Between BOS BETTER and Waste Management

Can any of the company-specific risk be diversified away by investing in both BOS BETTER and Waste Management 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 BOS BETTER and Waste Management into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BOS BETTER ONLINE and Waste Management, you can compare the effects of market volatilities on BOS BETTER and Waste Management 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 BOS BETTER with a short position of Waste Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOS BETTER and Waste Management.

Diversification Opportunities for BOS BETTER and Waste Management

0.0

Correlation Coefficient

BOS BETTER  Waste Management

Pay attention - limited upside

The 3 months correlation between BOS and Waste is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BOS BETTER ONLINE and Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management and BOS BETTER 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 BOS BETTER ONLINE are associated (or correlated) with Waste Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Management has no effect on the direction of BOS BETTER i.e., BOS BETTER and Waste Management go up and down completely randomly.

Pair Corralation between BOS BETTER and Waste Management

If you would invest  19,374  in Waste Management on December 21, 2024 and sell it today you would earn a total of  1,496  from holding Waste Management or generate 7.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BOS BETTER ONLINE  vs.  Waste Management

BOS BETTER ONLINE

Risk-Adjusted Performance

Very Weak

Over the last 90 days BOS BETTER ONLINE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, BOS BETTER is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Waste Management

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Waste Management are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Waste Management may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with BOS BETTER and Waste Management

The main advantage of trading using opposite BOS BETTER and Waste Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOS BETTER position performs unexpectedly, Waste Management 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 Waste Management will offset losses from the drop in Waste Management's long position.

The idea behind BOS BETTER ONLINE and Waste Management pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.