Correlation Between Coty and GFL Environmental
Can any of the company-specific risk be diversified away by investing in both Coty and GFL Environmental 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 Coty and GFL Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coty Inc and GFL Environmental, you can compare the effects of market volatilities on Coty and GFL Environmental 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 Coty with a short position of GFL Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coty and GFL Environmental.
Diversification Opportunities for Coty and GFL Environmental
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coty and GFL is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Coty Inc and GFL Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFL Environmental and Coty 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 Coty Inc are associated (or correlated) with GFL Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFL Environmental has no effect on the direction of Coty i.e., Coty and GFL Environmental go up and down completely randomly.
Pair Corralation between Coty and GFL Environmental
If you would invest 7,030 in GFL Environmental on September 14, 2024 and sell it today you would earn a total of 0.00 from holding GFL Environmental or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
Coty Inc vs. GFL Environmental
Performance |
| Timeline |
| Coty Inc |
| GFL Environmental |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Coty and GFL Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coty and GFL Environmental
The main advantage of trading using opposite Coty and GFL Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coty position performs unexpectedly, GFL Environmental 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 Environmental will offset losses from the drop in GFL Environmental's long position.The idea behind Coty Inc and GFL Environmental pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| GFL Environmental vs. Sligro Food Group | GFL Environmental vs. AMCON Distributing | GFL Environmental vs. Valneva SE ADR | GFL Environmental vs. Where Food Comes |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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