Correlation Between GFL ENVIRONM and Cal Maine
Can any of the company-specific risk be diversified away by investing in both GFL ENVIRONM and Cal Maine 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 Cal Maine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GFL ENVIRONM and Cal Maine Foods, you can compare the effects of market volatilities on GFL ENVIRONM and Cal Maine 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 Cal Maine. Check out your portfolio center. Please also check ongoing floating volatility patterns of GFL ENVIRONM and Cal Maine.
Diversification Opportunities for GFL ENVIRONM and Cal Maine
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GFL and Cal is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding GFL ENVIRONM and Cal Maine Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Maine Foods 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 Cal Maine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Maine Foods has no effect on the direction of GFL ENVIRONM i.e., GFL ENVIRONM and Cal Maine go up and down completely randomly.
Pair Corralation between GFL ENVIRONM and Cal Maine
Assuming the 90 days horizon GFL ENVIRONM is expected to under-perform the Cal Maine. But the stock apears to be less risky and, when comparing its historical volatility, GFL ENVIRONM is 2.01 times less risky than Cal Maine. The stock trades about -0.01 of its potential returns per unit of risk. The Cal Maine Foods is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 9,152 in Cal Maine Foods on September 25, 2024 and sell it today you would earn a total of 672.00 from holding Cal Maine Foods or generate 7.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GFL ENVIRONM vs. Cal Maine Foods
Performance |
| Timeline |
| GFL ENVIRONM |
| Cal Maine Foods |
GFL ENVIRONM and Cal Maine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GFL ENVIRONM and Cal Maine
The main advantage of trading using opposite GFL ENVIRONM and Cal Maine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GFL ENVIRONM position performs unexpectedly, Cal Maine 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 Cal Maine will offset losses from the drop in Cal Maine's long position.| GFL ENVIRONM vs. Games Workshop Group | GFL ENVIRONM vs. GEAR4MUSIC LS 10 | GFL ENVIRONM vs. JAPAN AIRLINES | GFL ENVIRONM vs. Nok Airlines PCL |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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