Correlation Between GFL ENVIRONM and Air Lease
Can any of the company-specific risk be diversified away by investing in both GFL ENVIRONM and Air Lease 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 Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GFL ENVIRONM and Air Lease, you can compare the effects of market volatilities on GFL ENVIRONM and Air Lease 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 Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of GFL ENVIRONM and Air Lease.
Diversification Opportunities for GFL ENVIRONM and Air Lease
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GFL and Air is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding GFL ENVIRONM and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease 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 Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of GFL ENVIRONM i.e., GFL ENVIRONM and Air Lease go up and down completely randomly.
Pair Corralation between GFL ENVIRONM and Air Lease
Assuming the 90 days horizon GFL ENVIRONM is expected to generate 1.05 times less return on investment than Air Lease. But when comparing it to its historical volatility, GFL ENVIRONM is 1.05 times less risky than Air Lease. It trades about 0.12 of its potential returns per unit of risk. Air Lease is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,499 in Air Lease on September 19, 2024 and sell it today you would earn a total of 181.00 from holding Air Lease or generate 4.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GFL ENVIRONM vs. Air Lease
Performance |
| Timeline |
| GFL ENVIRONM |
| Air Lease |
GFL ENVIRONM and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GFL ENVIRONM and Air Lease
The main advantage of trading using opposite GFL ENVIRONM and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GFL ENVIRONM position performs unexpectedly, Air Lease 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 Air Lease will offset losses from the drop in Air Lease's long position.| GFL ENVIRONM vs. Veolia Environnement SA | GFL ENVIRONM vs. Superior Plus Corp | GFL ENVIRONM vs. SIVERS SEMICONDUCTORS AB | GFL ENVIRONM vs. NorAm Drilling AS |
| Air Lease vs. Gruppo Mutuionline SpA | Air Lease vs. MITSUBISHI STEEL MFG | Air Lease vs. GFL ENVIRONM | Air Lease vs. YATRA ONLINE DL 0001 |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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