Correlation Between GFL ENVIRONM and BlueScope Steel
Can any of the company-specific risk be diversified away by investing in both GFL ENVIRONM and BlueScope Steel 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 BlueScope Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GFL ENVIRONM and BlueScope Steel Limited, you can compare the effects of market volatilities on GFL ENVIRONM and BlueScope Steel 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 BlueScope Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of GFL ENVIRONM and BlueScope Steel.
Diversification Opportunities for GFL ENVIRONM and BlueScope Steel
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between GFL and BlueScope is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding GFL ENVIRONM and BlueScope Steel Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlueScope Steel 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 BlueScope Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlueScope Steel has no effect on the direction of GFL ENVIRONM i.e., GFL ENVIRONM and BlueScope Steel go up and down completely randomly.
Pair Corralation between GFL ENVIRONM and BlueScope Steel
Assuming the 90 days horizon GFL ENVIRONM is expected to generate 0.82 times more return on investment than BlueScope Steel. However, GFL ENVIRONM is 1.22 times less risky than BlueScope Steel. It trades about 0.13 of its potential returns per unit of risk. BlueScope Steel Limited is currently generating about 0.06 per unit of risk. If you would invest 3,819 in GFL ENVIRONM on August 29, 2024 and sell it today you would earn a total of 541.00 from holding GFL ENVIRONM or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GFL ENVIRONM vs. BlueScope Steel Limited
Performance |
| Timeline |
| GFL ENVIRONM |
| BlueScope Steel |
GFL ENVIRONM and BlueScope Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GFL ENVIRONM and BlueScope Steel
The main advantage of trading using opposite GFL ENVIRONM and BlueScope Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GFL ENVIRONM position performs unexpectedly, BlueScope Steel 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 BlueScope Steel will offset losses from the drop in BlueScope Steel's long position.| GFL ENVIRONM vs. Waste Management | GFL ENVIRONM vs. Waste Connections | GFL ENVIRONM vs. Superior Plus Corp | GFL ENVIRONM vs. SIVERS SEMICONDUCTORS AB |
| BlueScope Steel vs. AM EAGLE OUTFITTERS | BlueScope Steel vs. International Game Technology | BlueScope Steel vs. Apollo Investment Corp | BlueScope Steel vs. Penn National Gaming |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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