Correlation Between Gfl Environmental and Medical Facilities
Can any of the company-specific risk be diversified away by investing in both Gfl Environmental and Medical Facilities 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 Gfl Environmental and Medical Facilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gfl Environmental Holdings and Medical Facilities, you can compare the effects of market volatilities on Gfl Environmental and Medical Facilities 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 Gfl Environmental with a short position of Medical Facilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gfl Environmental and Medical Facilities.
Diversification Opportunities for Gfl Environmental and Medical Facilities
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gfl and Medical is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Gfl Environmental Holdings and Medical Facilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Facilities and Gfl Environmental 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 Gfl Environmental Holdings are associated (or correlated) with Medical Facilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Facilities has no effect on the direction of Gfl Environmental i.e., Gfl Environmental and Medical Facilities go up and down completely randomly.
Pair Corralation between Gfl Environmental and Medical Facilities
Assuming the 90 days trading horizon Gfl Environmental Holdings is expected to generate 0.8 times more return on investment than Medical Facilities. However, Gfl Environmental Holdings is 1.25 times less risky than Medical Facilities. It trades about 0.43 of its potential returns per unit of risk. Medical Facilities is currently generating about 0.19 per unit of risk. If you would invest 5,571 in Gfl Environmental Holdings on August 29, 2024 and sell it today you would earn a total of 984.00 from holding Gfl Environmental Holdings or generate 17.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gfl Environmental Holdings vs. Medical Facilities
Performance |
| Timeline |
| Gfl Environmental |
| Medical Facilities |
Gfl Environmental and Medical Facilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gfl Environmental and Medical Facilities
The main advantage of trading using opposite Gfl Environmental and Medical Facilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gfl Environmental position performs unexpectedly, Medical Facilities 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 Medical Facilities will offset losses from the drop in Medical Facilities' long position.| Gfl Environmental vs. Cielo Waste Solutions | Gfl Environmental vs. CHAR Technologies | Gfl Environmental vs. Forstrong Global Income | Gfl Environmental vs. Terreno Resources Corp |
| Medical Facilities vs. Solar Alliance Energy | Medical Facilities vs. Braille Energy Systems | Medical Facilities vs. MedMira | Medical Facilities vs. Lite Access Technologies |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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