Correlation Between Enviri and Stericycle

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

By analyzing existing cross correlation between Enviri and Stericycle, you can compare the effects of market volatilities on Enviri and Stericycle 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 Stericycle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enviri and Stericycle.

Diversification Opportunities for Enviri and Stericycle

0.0

Correlation Coefficient

Enviri  Stericycle

Pay attention - limited upside

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

Pair Corralation between Enviri and Stericycle

If you would invest (100.00) in Stericycle on January 7, 2025 and sell it today you would earn a total of  100.00  from holding Stericycle or generate -100.0% return on investment over 90 days.

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

Enviri  vs.  Stericycle

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.

Stericycle

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stericycle has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Stericycle is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Enviri and Stericycle

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

The idea behind Enviri and Stericycle 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.