Correlation Between Gfl Environmental and Casella Waste
Can any of the company-specific risk be diversified away by investing in both Gfl Environmental and Casella Waste 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 Casella Waste 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 Casella Waste Systems, you can compare the effects of market volatilities on Gfl Environmental and Casella Waste 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 Casella Waste. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gfl Environmental and Casella Waste.
Diversification Opportunities for Gfl Environmental and Casella Waste
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gfl and Casella is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Gfl Environmental Holdings and Casella Waste Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casella Waste Systems 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 Casella Waste. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casella Waste Systems has no effect on the direction of Gfl Environmental i.e., Gfl Environmental and Casella Waste go up and down completely randomly.
Pair Corralation between Gfl Environmental and Casella Waste
Considering the 90-day investment horizon Gfl Environmental Holdings is expected to generate 1.17 times more return on investment than Casella Waste. However, Gfl Environmental is 1.17 times more volatile than Casella Waste Systems. It trades about 0.07 of its potential returns per unit of risk. Casella Waste Systems is currently generating about 0.05 per unit of risk. If you would invest 2,799 in Gfl Environmental Holdings on August 27, 2024 and sell it today you would earn a total of 1,789 from holding Gfl Environmental Holdings or generate 63.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gfl Environmental Holdings vs. Casella Waste Systems
Performance |
| Timeline |
| Gfl Environmental |
| Casella Waste Systems |
Gfl Environmental and Casella Waste Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gfl Environmental and Casella Waste
The main advantage of trading using opposite Gfl Environmental and Casella Waste positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gfl Environmental position performs unexpectedly, Casella Waste 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 Casella Waste will offset losses from the drop in Casella Waste's long position.| Gfl Environmental vs. Clean Harbors | Gfl Environmental vs. Waste Connections | Gfl Environmental vs. Republic Services | Gfl Environmental vs. Casella Waste Systems |
| Casella Waste vs. Clean Harbors | Casella Waste vs. Montrose Environmental Grp | Casella Waste vs. Republic Services | Casella Waste vs. Waste Connections |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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