Correlation Between Gfl Environmental and Block
Can any of the company-specific risk be diversified away by investing in both Gfl Environmental and Block 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 Block 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 Block Inc, you can compare the effects of market volatilities on Gfl Environmental and Block 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 Block. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gfl Environmental and Block.
Diversification Opportunities for Gfl Environmental and Block
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gfl and Block is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Gfl Environmental Holdings and Block Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Block Inc 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 Block. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Block Inc has no effect on the direction of Gfl Environmental i.e., Gfl Environmental and Block go up and down completely randomly.
Pair Corralation between Gfl Environmental and Block
Considering the 90-day investment horizon Gfl Environmental is expected to generate 4.5 times less return on investment than Block. But when comparing it to its historical volatility, Gfl Environmental Holdings is 1.77 times less risky than Block. It trades about 0.08 of its potential returns per unit of risk. Block Inc is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 6,556 in Block Inc on August 26, 2024 and sell it today you would earn a total of 2,670 from holding Block Inc or generate 40.73% 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. Block Inc
Performance |
| Timeline |
| Gfl Environmental |
| Block Inc |
Gfl Environmental and Block Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gfl Environmental and Block
The main advantage of trading using opposite Gfl Environmental and Block positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gfl Environmental position performs unexpectedly, Block 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 Block will offset losses from the drop in Block's long position.| Gfl Environmental vs. Clean Harbors | Gfl Environmental vs. Waste Connections | Gfl Environmental vs. Republic Services | Gfl Environmental vs. Casella Waste Systems |
| Block vs. Oneconnect Financial Technology | Block vs. Global Business Travel | Block vs. Alight Inc | Block vs. CS Disco LLC |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |