Correlation Between Veralto and Waste Connections

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

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

Diversification Opportunities for Veralto and Waste Connections

-0.54

Correlation Coefficient

Veralto  Waste Connections

Excellent diversification

The 3 months correlation between Veralto and Waste is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Veralto and Waste Connections in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Connections and Veralto 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 Veralto are associated (or correlated) with Waste Connections. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Connections has no effect on the direction of Veralto i.e., Veralto and Waste Connections go up and down completely randomly.

Pair Corralation between Veralto and Waste Connections

Given the investment horizon of 90 days Veralto is expected to generate 0.84 times more return on investment than Waste Connections. However, Veralto is 1.19 times less risky than Waste Connections. It trades about 0.19 of its potential returns per unit of risk. Waste Connections is currently generating about -0.07 per unit of risk. If you would invest  9,526  in Veralto on May 6, 2025 and sell it today you would earn a total of  1,169  from holding Veralto or generate 12.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Veralto  vs.  Waste Connections

Veralto

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Veralto are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Veralto may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Waste Connections

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Veralto and Waste Connections

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

The idea behind Veralto and Waste Connections 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 Transaction History module to view history of all your transactions and understand their impact on performance.