Correlation Between GFL ENVIRONM and NIPPON STEEL
Can any of the company-specific risk be diversified away by investing in both GFL ENVIRONM and NIPPON 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 NIPPON 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 NIPPON STEEL SPADR, you can compare the effects of market volatilities on GFL ENVIRONM and NIPPON 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 NIPPON STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of GFL ENVIRONM and NIPPON STEEL.
Diversification Opportunities for GFL ENVIRONM and NIPPON STEEL
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between GFL and NIPPON is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding GFL ENVIRONM and NIPPON STEEL SPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIPPON STEEL SPADR 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 NIPPON STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIPPON STEEL SPADR has no effect on the direction of GFL ENVIRONM i.e., GFL ENVIRONM and NIPPON STEEL go up and down completely randomly.
Pair Corralation between GFL ENVIRONM and NIPPON STEEL
Assuming the 90 days horizon GFL ENVIRONM is expected to generate 1.54 times more return on investment than NIPPON STEEL. However, GFL ENVIRONM is 1.54 times more volatile than NIPPON STEEL SPADR. It trades about 0.38 of its potential returns per unit of risk. NIPPON STEEL SPADR is currently generating about 0.18 per unit of risk. If you would invest 3,720 in GFL ENVIRONM on August 28, 2024 and sell it today you would earn a total of 640.00 from holding GFL ENVIRONM or generate 17.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GFL ENVIRONM vs. NIPPON STEEL SPADR
Performance |
| Timeline |
| GFL ENVIRONM |
| NIPPON STEEL SPADR |
GFL ENVIRONM and NIPPON STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GFL ENVIRONM and NIPPON STEEL
The main advantage of trading using opposite GFL ENVIRONM and NIPPON STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GFL ENVIRONM position performs unexpectedly, NIPPON 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 NIPPON STEEL will offset losses from the drop in NIPPON STEEL'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 |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |