Correlation Between GFL ENVIRONM and Stitch Fix
Can any of the company-specific risk be diversified away by investing in both GFL ENVIRONM and Stitch Fix 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 Stitch Fix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GFL ENVIRONM and Stitch Fix, you can compare the effects of market volatilities on GFL ENVIRONM and Stitch Fix 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 Stitch Fix. Check out your portfolio center. Please also check ongoing floating volatility patterns of GFL ENVIRONM and Stitch Fix.
Diversification Opportunities for GFL ENVIRONM and Stitch Fix
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GFL and Stitch is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding GFL ENVIRONM and Stitch Fix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stitch Fix 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 Stitch Fix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stitch Fix has no effect on the direction of GFL ENVIRONM i.e., GFL ENVIRONM and Stitch Fix go up and down completely randomly.
Pair Corralation between GFL ENVIRONM and Stitch Fix
Assuming the 90 days horizon GFL ENVIRONM is expected to generate 1.82 times less return on investment than Stitch Fix. But when comparing it to its historical volatility, GFL ENVIRONM is 1.93 times less risky than Stitch Fix. It trades about 0.39 of its potential returns per unit of risk. Stitch Fix is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 306.00 in Stitch Fix on September 5, 2024 and sell it today you would earn a total of 112.00 from holding Stitch Fix or generate 36.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
GFL ENVIRONM vs. Stitch Fix
Performance |
| Timeline |
| GFL ENVIRONM |
| Stitch Fix |
GFL ENVIRONM and Stitch Fix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GFL ENVIRONM and Stitch Fix
The main advantage of trading using opposite GFL ENVIRONM and Stitch Fix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GFL ENVIRONM position performs unexpectedly, Stitch Fix 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 Stitch Fix will offset losses from the drop in Stitch Fix's long position.| GFL ENVIRONM vs. Waste Management | GFL ENVIRONM vs. Republic Services | GFL ENVIRONM vs. Waste Connections | GFL ENVIRONM vs. Veolia Environnement SA |
| Stitch Fix vs. Gaztransport Technigaz SA | Stitch Fix vs. QUEEN S ROAD | Stitch Fix vs. SCANSOURCE | Stitch Fix vs. BROADWIND ENRGY |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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