Correlation Between Auckland International and GFL ENVIRONM
Can any of the company-specific risk be diversified away by investing in both Auckland International and GFL ENVIRONM 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 Auckland International and GFL ENVIRONM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auckland International Airport and GFL ENVIRONM, you can compare the effects of market volatilities on Auckland International and GFL ENVIRONM 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 Auckland International with a short position of GFL ENVIRONM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auckland International and GFL ENVIRONM.
Diversification Opportunities for Auckland International and GFL ENVIRONM
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Auckland and GFL is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Auckland International Airport and GFL ENVIRONM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFL ENVIRONM and Auckland International 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 Auckland International Airport are associated (or correlated) with GFL ENVIRONM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFL ENVIRONM has no effect on the direction of Auckland International i.e., Auckland International and GFL ENVIRONM go up and down completely randomly.
Pair Corralation between Auckland International and GFL ENVIRONM
Assuming the 90 days trading horizon Auckland International is expected to generate 1.59 times less return on investment than GFL ENVIRONM. In addition to that, Auckland International is 1.16 times more volatile than GFL ENVIRONM. It trades about 0.21 of its total potential returns per unit of risk. GFL ENVIRONM is currently generating about 0.39 per unit of volatility. If you would invest 3,820 in GFL ENVIRONM on September 4, 2024 and sell it today you would earn a total of 700.00 from holding GFL ENVIRONM or generate 18.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auckland International Airport vs. GFL ENVIRONM
Performance |
| Timeline |
| Auckland International |
| GFL ENVIRONM |
Auckland International and GFL ENVIRONM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auckland International and GFL ENVIRONM
The main advantage of trading using opposite Auckland International and GFL ENVIRONM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auckland International position performs unexpectedly, GFL ENVIRONM 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 GFL ENVIRONM will offset losses from the drop in GFL ENVIRONM's long position.| Auckland International vs. Host Hotels Resorts | Auckland International vs. COMMERCIAL VEHICLE | Auckland International vs. Motorcar Parts of | Auckland International vs. Hyatt Hotels |
| GFL ENVIRONM vs. Waste Management | GFL ENVIRONM vs. Republic Services | GFL ENVIRONM vs. Waste Connections | GFL ENVIRONM vs. Veolia Environnement SA |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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