Correlation Between Deluxe and Gfl Environmental
Can any of the company-specific risk be diversified away by investing in both Deluxe 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 Deluxe and Gfl Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deluxe and Gfl Environmental Holdings, you can compare the effects of market volatilities on Deluxe 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 Deluxe with a short position of Gfl Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deluxe and Gfl Environmental.
Diversification Opportunities for Deluxe and Gfl Environmental
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Deluxe and Gfl is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Deluxe and Gfl Environmental Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfl Environmental and Deluxe 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 Deluxe 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 Deluxe i.e., Deluxe and Gfl Environmental go up and down completely randomly.
Pair Corralation between Deluxe and Gfl Environmental
Considering the 90-day investment horizon Deluxe is expected to generate 1.14 times less return on investment than Gfl Environmental. In addition to that, Deluxe is 1.37 times more volatile than Gfl Environmental Holdings. It trades about 0.04 of its total potential returns per unit of risk. Gfl Environmental Holdings is currently generating about 0.06 per unit of volatility. If you would invest 2,938 in Gfl Environmental Holdings on August 23, 2024 and sell it today you would earn a total of 1,589 from holding Gfl Environmental Holdings or generate 54.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deluxe vs. Gfl Environmental Holdings
Performance |
| Timeline |
| Deluxe |
| Gfl Environmental |
Deluxe and Gfl Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deluxe and Gfl Environmental
The main advantage of trading using opposite Deluxe and Gfl Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deluxe 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.| Deluxe vs. Criteo Sa | Deluxe vs. Emerald Expositions Events | Deluxe vs. Marchex | Deluxe vs. Integral Ad Science |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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