Correlation Between Waste Management and St Georges

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

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

Diversification Opportunities for Waste Management and St Georges

0.63

Correlation Coefficient

Waste Management  St Georges

Poor diversification

The 3 months correlation between Waste and SXOOF is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Waste Management and St Georges Eco Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Georges Eco and Waste Management 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 Waste Management are associated (or correlated) with St Georges. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Georges Eco has no effect on the direction of Waste Management i.e., Waste Management and St Georges go up and down completely randomly.

Pair Corralation between Waste Management and St Georges

Allowing for the 90-day total investment horizon Waste Management is expected to under-perform the St Georges. But the stock apears to be less risky and, when comparing its historical volatility, Waste Management is 7.59 times less risky than St Georges. The stock trades about -0.02 of its potential returns per unit of risk. The St Georges Eco Mining Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  4.40  in St Georges Eco Mining Corp on May 6, 2025 and sell it today you would lose (0.10) from holding St Georges Eco Mining Corp or give up 2.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Waste Management  vs.  St Georges Eco Mining Corp

Waste Management

Risk-Adjusted Performance

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 recent stock price disarray, may contribute to short-term losses for the investors.

St Georges Eco

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Waste Management and St Georges

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

The idea behind Waste Management and St Georges Eco Mining Corp 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.