Correlation Between Gfl Environmental and Martinrea International
Can any of the company-specific risk be diversified away by investing in both Gfl Environmental and Martinrea International 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 Martinrea International 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 Martinrea International, you can compare the effects of market volatilities on Gfl Environmental and Martinrea International 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 Martinrea International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gfl Environmental and Martinrea International.
Diversification Opportunities for Gfl Environmental and Martinrea International
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gfl and Martinrea is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Gfl Environmental Holdings and Martinrea International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martinrea International 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 Martinrea International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martinrea International has no effect on the direction of Gfl Environmental i.e., Gfl Environmental and Martinrea International go up and down completely randomly.
Pair Corralation between Gfl Environmental and Martinrea International
Assuming the 90 days trading horizon Gfl Environmental Holdings is expected to under-perform the Martinrea International. But the stock apears to be less risky and, when comparing its historical volatility, Gfl Environmental Holdings is 1.39 times less risky than Martinrea International. The stock trades about -0.08 of its potential returns per unit of risk. The Martinrea International is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 900.00 in Martinrea International on November 3, 2024 and sell it today you would lose (21.00) from holding Martinrea International or give up 2.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gfl Environmental Holdings vs. Martinrea International
Performance |
| Timeline |
| Gfl Environmental |
| Martinrea International |
Gfl Environmental and Martinrea International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gfl Environmental and Martinrea International
The main advantage of trading using opposite Gfl Environmental and Martinrea International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gfl Environmental position performs unexpectedly, Martinrea International 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 Martinrea International will offset losses from the drop in Martinrea International's long position.| Gfl Environmental vs. Waste Connections | Gfl Environmental vs. TFI International | Gfl Environmental vs. WSP Global | Gfl Environmental vs. Dye Durham |
| Martinrea International vs. Linamar | Martinrea International vs. Aecon Group | Martinrea International vs. NFI Group | Martinrea International vs. Element Fleet Management |
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 CEOs Directory module to screen CEOs from public companies around the world.
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