Correlation Between Bitcoin Depot and Waste Management

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

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

Diversification Opportunities for Bitcoin Depot and Waste Management

0.54

Correlation Coefficient

Bitcoin Depot  Waste Management

Very weak diversification

The 3 months correlation between Bitcoin and Waste is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Depot and Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management and Bitcoin Depot 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 Bitcoin Depot 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 Bitcoin Depot i.e., Bitcoin Depot and Waste Management go up and down completely randomly.

Pair Corralation between Bitcoin Depot and Waste Management

Considering the 90-day investment horizon Bitcoin Depot is expected to under-perform the Waste Management. In addition to that, Bitcoin Depot is 6.13 times more volatile than Waste Management. It trades about -0.2 of its total potential returns per unit of risk. Waste Management is currently generating about -0.64 per unit of volatility. If you would invest  22,669  in Waste Management on September 27, 2024 and sell it today you would lose (2,167) from holding Waste Management or give up 9.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Bitcoin Depot  vs.  Waste Management

Bitcoin Depot

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin Depot are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Bitcoin Depot displayed solid returns over the last few months and may actually be approaching a breakup point.

Waste Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Waste Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Waste Management is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Bitcoin Depot and Waste Management

The main advantage of trading using opposite Bitcoin Depot and Waste Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Depot 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 Bitcoin Depot 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.