Correlation Between Forstrong Global and Gfl Environmental
Can any of the company-specific risk be diversified away by investing in both Forstrong Global 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 Forstrong Global and Gfl Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forstrong Global Income and Gfl Environmental Holdings, you can compare the effects of market volatilities on Forstrong Global 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 Forstrong Global with a short position of Gfl Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forstrong Global and Gfl Environmental.
Diversification Opportunities for Forstrong Global and Gfl Environmental
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Forstrong and Gfl is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Forstrong Global Income and Gfl Environmental Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfl Environmental and Forstrong Global 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 Forstrong Global Income 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 Forstrong Global i.e., Forstrong Global and Gfl Environmental go up and down completely randomly.
Pair Corralation between Forstrong Global and Gfl Environmental
Assuming the 90 days trading horizon Forstrong Global is expected to generate 128.78 times less return on investment than Gfl Environmental. But when comparing it to its historical volatility, Forstrong Global Income is 5.83 times less risky than Gfl Environmental. It trades about 0.01 of its potential returns per unit of risk. Gfl Environmental Holdings is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 5,395 in Gfl Environmental Holdings on August 29, 2024 and sell it today you would earn a total of 1,160 from holding Gfl Environmental Holdings or generate 21.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Forstrong Global Income vs. Gfl Environmental Holdings
Performance |
| Timeline |
| Forstrong Global Income |
| Gfl Environmental |
Forstrong Global and Gfl Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forstrong Global and Gfl Environmental
The main advantage of trading using opposite Forstrong Global and Gfl Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forstrong Global 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.| Forstrong Global vs. Forstrong Global Ex North | Forstrong Global vs. Forstrong Global Growth | Forstrong Global vs. Forstrong Emerging Markets | Forstrong Global vs. NBI High Yield |
| Gfl Environmental vs. Cielo Waste Solutions | Gfl Environmental vs. CHAR Technologies | Gfl Environmental vs. Forstrong Global Income | Gfl Environmental vs. Terreno Resources Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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