Correlation Between Gfl Environmental and Profound Medical
Can any of the company-specific risk be diversified away by investing in both Gfl Environmental and Profound Medical 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 Profound Medical 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 Profound Medical Corp, you can compare the effects of market volatilities on Gfl Environmental and Profound Medical 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 Profound Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gfl Environmental and Profound Medical.
Diversification Opportunities for Gfl Environmental and Profound Medical
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gfl and Profound is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Gfl Environmental Holdings and Profound Medical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profound Medical Corp 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 Profound Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profound Medical Corp has no effect on the direction of Gfl Environmental i.e., Gfl Environmental and Profound Medical go up and down completely randomly.
Pair Corralation between Gfl Environmental and Profound Medical
Assuming the 90 days trading horizon Gfl Environmental is expected to generate 1.23 times less return on investment than Profound Medical. But when comparing it to its historical volatility, Gfl Environmental Holdings is 2.67 times less risky than Profound Medical. It trades about 0.24 of its potential returns per unit of risk. Profound Medical Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 997.00 in Profound Medical Corp on November 27, 2024 and sell it today you would earn a total of 64.00 from holding Profound Medical Corp or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gfl Environmental Holdings vs. Profound Medical Corp
Performance |
| Timeline |
| Gfl Environmental |
| Profound Medical Corp |
Gfl Environmental and Profound Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gfl Environmental and Profound Medical
The main advantage of trading using opposite Gfl Environmental and Profound Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gfl Environmental position performs unexpectedly, Profound Medical 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 Profound Medical will offset losses from the drop in Profound Medical's long position.| Gfl Environmental vs. Waste Connections | Gfl Environmental vs. TFI International | Gfl Environmental vs. WSP Global | Gfl Environmental vs. Dye Durham |
| Profound Medical vs. HLS Therapeutics | Profound Medical vs. Medicenna Therapeutics Corp | Profound Medical vs. Aptose Biosciences |
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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