Correlation Between Enviri and Casella Waste

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

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

Diversification Opportunities for Enviri and Casella Waste

0.0

Correlation Coefficient

Enviri  Casella Waste

Pay attention - limited upside

The 3 months correlation between Enviri and Casella is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Enviri 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 Enviri 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 Enviri 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 Enviri i.e., Enviri and Casella Waste go up and down completely randomly.

Pair Corralation between Enviri and Casella Waste

If you would invest  10,542  in Casella Waste Systems on December 29, 2024 and sell it today you would earn a total of  528.00  from holding Casella Waste Systems or generate 5.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Enviri  vs.  Casella Waste Systems

Enviri

Risk-Adjusted Performance

Very Weak

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

Casella Waste Systems

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Casella Waste Systems are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Casella Waste is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Enviri and Casella Waste

The main advantage of trading using opposite Enviri and Casella Waste positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enviri 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.

The idea behind Enviri and Casella Waste Systems 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.