Correlation Between Gfl Environmental and NIKE
Can any of the company-specific risk be diversified away by investing in both Gfl Environmental and NIKE 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 NIKE 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 NIKE Inc CDR, you can compare the effects of market volatilities on Gfl Environmental and NIKE 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 NIKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gfl Environmental and NIKE.
Diversification Opportunities for Gfl Environmental and NIKE
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gfl and NIKE is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Gfl Environmental Holdings and NIKE Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKE Inc CDR 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 NIKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIKE Inc CDR has no effect on the direction of Gfl Environmental i.e., Gfl Environmental and NIKE go up and down completely randomly.
Pair Corralation between Gfl Environmental and NIKE
Assuming the 90 days trading horizon Gfl Environmental Holdings is expected to generate 1.04 times more return on investment than NIKE. However, Gfl Environmental is 1.04 times more volatile than NIKE Inc CDR. It trades about 0.38 of its potential returns per unit of risk. NIKE Inc CDR is currently generating about 0.04 per unit of risk. If you would invest 5,805 in Gfl Environmental Holdings on September 2, 2024 and sell it today you would earn a total of 836.00 from holding Gfl Environmental Holdings or generate 14.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gfl Environmental Holdings vs. NIKE Inc CDR
Performance |
| Timeline |
| Gfl Environmental |
| NIKE Inc CDR |
Gfl Environmental and NIKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gfl Environmental and NIKE
The main advantage of trading using opposite Gfl Environmental and NIKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gfl Environmental position performs unexpectedly, NIKE 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 NIKE will offset losses from the drop in NIKE's long position.| Gfl Environmental vs. Waste Connections | Gfl Environmental vs. TFI International | Gfl Environmental vs. WSP Global | Gfl Environmental vs. Dye Durham |
| NIKE vs. Advent Wireless | NIKE vs. Totally Hip Technologies | NIKE vs. Ocumetics Technology Corp | NIKE vs. Brookfield Office Properties |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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