Correlation Between Crane and Gfl Environmental
Can any of the company-specific risk be diversified away by investing in both Crane 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 Crane and Gfl Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crane Company and Gfl Environmental Holdings, you can compare the effects of market volatilities on Crane 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 Crane with a short position of Gfl Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crane and Gfl Environmental.
Diversification Opportunities for Crane and Gfl Environmental
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Crane and Gfl is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Crane Company and Gfl Environmental Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfl Environmental and Crane 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 Crane Company 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 Crane i.e., Crane and Gfl Environmental go up and down completely randomly.
Pair Corralation between Crane and Gfl Environmental
Allowing for the 90-day total investment horizon Crane is expected to generate 1.02 times less return on investment than Gfl Environmental. In addition to that, Crane is 2.74 times more volatile than Gfl Environmental Holdings. It trades about 0.16 of its total potential returns per unit of risk. Gfl Environmental Holdings is currently generating about 0.44 per unit of volatility. If you would invest 4,194 in Gfl Environmental Holdings on November 18, 2024 and sell it today you would earn a total of 461.00 from holding Gfl Environmental Holdings or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crane Company vs. Gfl Environmental Holdings
Performance |
| Timeline |
| Crane Company |
| Gfl Environmental |
Crane and Gfl Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crane and Gfl Environmental
The main advantage of trading using opposite Crane and Gfl Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crane 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.| Crane vs. Standex International | Crane vs. Donaldson | Crane vs. CSW Industrials | Crane vs. Franklin Electric Co |
| Gfl Environmental vs. Clean Harbors | Gfl Environmental vs. Waste Connections | Gfl Environmental vs. Republic Services | Gfl Environmental vs. Casella Waste Systems |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |