Correlation Between Driven Brands and CDT Environmental

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

By analyzing existing cross correlation between Driven Brands Holdings and CDT Environmental Technology, you can compare the effects of market volatilities on Driven Brands and CDT Environmental 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 Driven Brands with a short position of CDT Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Driven Brands and CDT Environmental.

Diversification Opportunities for Driven Brands and CDT Environmental

-0.43

Correlation Coefficient

Driven Brands  CDT Environmental

Very good diversification

The 3 months correlation between Driven and CDT is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Driven Brands Holdings and CDT Environmental Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDT Environmental and Driven Brands 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 Driven Brands Holdings are associated (or correlated) with CDT Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDT Environmental has no effect on the direction of Driven Brands i.e., Driven Brands and CDT Environmental go up and down completely randomly.

Pair Corralation between Driven Brands and CDT Environmental

Given the investment horizon of 90 days Driven Brands Holdings is expected to under-perform the CDT Environmental. But the etf apears to be less risky and, when comparing its historical volatility, Driven Brands Holdings is 5.33 times less risky than CDT Environmental. The etf trades about -0.06 of its potential returns per unit of risk. The CDT Environmental Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  64.00  in CDT Environmental Technology on May 10, 2025 and sell it today you would lose (3.00) from holding CDT Environmental Technology or give up 4.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Driven Brands Holdings  vs.  CDT Environmental Technology

Driven Brands Holdings

Risk-Adjusted Performance

Weakest

Over the last 90 days Driven Brands Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

CDT Environmental

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CDT Environmental Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, CDT Environmental reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Driven Brands and CDT Environmental

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

The idea behind Driven Brands Holdings and CDT Environmental Technology 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.