Correlation Between Gfl Environmental and Clean Harbors
Can any of the company-specific risk be diversified away by investing in both Gfl Environmental and Clean Harbors 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 Clean Harbors 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 Clean Harbors, you can compare the effects of market volatilities on Gfl Environmental and Clean Harbors 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 Clean Harbors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gfl Environmental and Clean Harbors.
Diversification Opportunities for Gfl Environmental and Clean Harbors
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gfl and Clean is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Gfl Environmental Holdings and Clean Harbors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Harbors 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 Clean Harbors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Harbors has no effect on the direction of Gfl Environmental i.e., Gfl Environmental and Clean Harbors go up and down completely randomly.
Pair Corralation between Gfl Environmental and Clean Harbors
Considering the 90-day investment horizon Gfl Environmental is expected to generate 1.31 times less return on investment than Clean Harbors. In addition to that, Gfl Environmental is 1.02 times more volatile than Clean Harbors. It trades about 0.08 of its total potential returns per unit of risk. Clean Harbors is currently generating about 0.11 per unit of volatility. If you would invest 18,210 in Clean Harbors on August 27, 2024 and sell it today you would earn a total of 7,040 from holding Clean Harbors or generate 38.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gfl Environmental Holdings vs. Clean Harbors
Performance |
| Timeline |
| Gfl Environmental |
| Clean Harbors |
Gfl Environmental and Clean Harbors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gfl Environmental and Clean Harbors
The main advantage of trading using opposite Gfl Environmental and Clean Harbors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gfl Environmental position performs unexpectedly, Clean Harbors 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 Clean Harbors will offset losses from the drop in Clean Harbors' long position.| Gfl Environmental vs. Clean Harbors | Gfl Environmental vs. Waste Connections | Gfl Environmental vs. Republic Services | Gfl Environmental vs. Casella Waste Systems |
| Clean Harbors vs. Waste Connections | Clean Harbors vs. Casella Waste Systems | Clean Harbors vs. Waste Management | Clean Harbors vs. Gfl Environmental Holdings |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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