Correlation Between GFL ENVIRONM and Elysee Development
Can any of the company-specific risk be diversified away by investing in both GFL ENVIRONM and Elysee Development 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 Elysee Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GFL ENVIRONM and Elysee Development Corp, you can compare the effects of market volatilities on GFL ENVIRONM and Elysee Development 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 Elysee Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of GFL ENVIRONM and Elysee Development.
Diversification Opportunities for GFL ENVIRONM and Elysee Development
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GFL and Elysee is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding GFL ENVIRONM and Elysee Development Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elysee Development Corp 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 Elysee Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elysee Development Corp has no effect on the direction of GFL ENVIRONM i.e., GFL ENVIRONM and Elysee Development go up and down completely randomly.
Pair Corralation between GFL ENVIRONM and Elysee Development
Assuming the 90 days horizon GFL ENVIRONM is expected to generate 2.99 times less return on investment than Elysee Development. But when comparing it to its historical volatility, GFL ENVIRONM is 4.45 times less risky than Elysee Development. It trades about 0.06 of its potential returns per unit of risk. Elysee Development Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Elysee Development Corp on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Elysee Development Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
GFL ENVIRONM vs. Elysee Development Corp
Performance |
| Timeline |
| GFL ENVIRONM |
| Elysee Development Corp |
GFL ENVIRONM and Elysee Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GFL ENVIRONM and Elysee Development
The main advantage of trading using opposite GFL ENVIRONM and Elysee Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GFL ENVIRONM position performs unexpectedly, Elysee Development 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 Elysee Development will offset losses from the drop in Elysee Development'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 |
| Elysee Development vs. Ameriprise Financial | Elysee Development vs. Ares Management Corp | Elysee Development vs. Superior Plus Corp | Elysee Development 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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