Correlation Between GFL ENVIRONM and Postal Savings
Can any of the company-specific risk be diversified away by investing in both GFL ENVIRONM and Postal Savings 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 GFL ENVIRONM and Postal Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GFL ENVIRONM and Postal Savings Bank, you can compare the effects of market volatilities on GFL ENVIRONM and Postal Savings 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 GFL ENVIRONM with a short position of Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of GFL ENVIRONM and Postal Savings.
Diversification Opportunities for GFL ENVIRONM and Postal Savings
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GFL and Postal is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding GFL ENVIRONM and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank and GFL ENVIRONM 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 GFL ENVIRONM are associated (or correlated) with Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of GFL ENVIRONM i.e., GFL ENVIRONM and Postal Savings go up and down completely randomly.
Pair Corralation between GFL ENVIRONM and Postal Savings
Assuming the 90 days horizon GFL ENVIRONM is expected to generate 7.42 times less return on investment than Postal Savings. But when comparing it to its historical volatility, GFL ENVIRONM is 4.25 times less risky than Postal Savings. It trades about 0.05 of its potential returns per unit of risk. Postal Savings Bank is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 8.11 in Postal Savings Bank on August 29, 2024 and sell it today you would earn a total of 45.89 from holding Postal Savings Bank or generate 565.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GFL ENVIRONM vs. Postal Savings Bank
Performance |
| Timeline |
| GFL ENVIRONM |
| Postal Savings Bank |
GFL ENVIRONM and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GFL ENVIRONM and Postal Savings
The main advantage of trading using opposite GFL ENVIRONM and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GFL ENVIRONM position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.| GFL ENVIRONM vs. Superior Plus Corp | GFL ENVIRONM vs. NMI Holdings | GFL ENVIRONM vs. Origin Agritech | GFL ENVIRONM vs. SIVERS SEMICONDUCTORS AB |
| Postal Savings vs. Deutsche Bank Aktiengesellschaft | Postal Savings vs. Superior Plus Corp | Postal Savings vs. NMI Holdings | Postal Savings vs. Origin Agritech |
Check out your portfolio center.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.
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