Correlation Between GFL ENVIRONM and Japan Tobacco
Can any of the company-specific risk be diversified away by investing in both GFL ENVIRONM and Japan Tobacco 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 Japan Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GFL ENVIRONM and Japan Tobacco, you can compare the effects of market volatilities on GFL ENVIRONM and Japan Tobacco 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 Japan Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of GFL ENVIRONM and Japan Tobacco.
Diversification Opportunities for GFL ENVIRONM and Japan Tobacco
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GFL and Japan is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding GFL ENVIRONM and Japan Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Tobacco 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 Japan Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Tobacco has no effect on the direction of GFL ENVIRONM i.e., GFL ENVIRONM and Japan Tobacco go up and down completely randomly.
Pair Corralation between GFL ENVIRONM and Japan Tobacco
Assuming the 90 days horizon GFL ENVIRONM is expected to generate 1.19 times more return on investment than Japan Tobacco. However, GFL ENVIRONM is 1.19 times more volatile than Japan Tobacco. It trades about 0.3 of its potential returns per unit of risk. Japan Tobacco is currently generating about 0.02 per unit of risk. If you would invest 3,519 in GFL ENVIRONM on August 28, 2024 and sell it today you would earn a total of 841.00 from holding GFL ENVIRONM or generate 23.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
GFL ENVIRONM vs. Japan Tobacco
Performance |
Timeline |
GFL ENVIRONM |
Japan Tobacco |
GFL ENVIRONM and Japan Tobacco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GFL ENVIRONM and Japan Tobacco
The main advantage of trading using opposite GFL ENVIRONM and Japan Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GFL ENVIRONM position performs unexpectedly, Japan Tobacco 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 Japan Tobacco will offset losses from the drop in Japan Tobacco's long position.GFL ENVIRONM vs. Superior Plus Corp | GFL ENVIRONM vs. NMI Holdings | GFL ENVIRONM vs. Origin Agritech | GFL ENVIRONM vs. SIVERS SEMICONDUCTORS AB |
Japan Tobacco vs. Applied Materials | Japan Tobacco vs. SANOK RUBBER ZY | Japan Tobacco vs. Entravision Communications | Japan Tobacco vs. Universal Display |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |