Correlation Between Easy Software and Waste Management

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

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

Diversification Opportunities for Easy Software and Waste Management

-0.25

Correlation Coefficient

Easy Software  Waste Management

Very good diversification

The 3 months correlation between Easy and Waste is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Easy Software AG and Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management and Easy Software 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 Easy Software AG 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 Easy Software i.e., Easy Software and Waste Management go up and down completely randomly.

Pair Corralation between Easy Software and Waste Management

Assuming the 90 days trading horizon Easy Software AG is expected to generate 2.11 times more return on investment than Waste Management. However, Easy Software is 2.11 times more volatile than Waste Management. It trades about 0.03 of its potential returns per unit of risk. Waste Management is currently generating about -0.06 per unit of risk. If you would invest  1,721  in Easy Software AG on April 23, 2025 and sell it today you would earn a total of  39.00  from holding Easy Software AG or generate 2.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Easy Software AG  vs.  Waste Management

Easy Software AG

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Easy Software AG are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Easy Software is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

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 comparatively stable basic indicators, Waste Management is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Easy Software and Waste Management

The main advantage of trading using opposite Easy Software and Waste Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easy Software 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 Easy Software AG 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 Commodity Directory module to find actively traded commodities issued by global exchanges.