Correlation Between Gfl Environmental and Stericycle
Can any of the company-specific risk be diversified away by investing in both Gfl Environmental and Stericycle 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 Stericycle 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 Stericycle, you can compare the effects of market volatilities on Gfl Environmental and Stericycle 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 Stericycle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gfl Environmental and Stericycle.
Diversification Opportunities for Gfl Environmental and Stericycle
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gfl and Stericycle is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Gfl Environmental Holdings and Stericycle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stericycle 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 Stericycle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stericycle has no effect on the direction of Gfl Environmental i.e., Gfl Environmental and Stericycle go up and down completely randomly.
Pair Corralation between Gfl Environmental and Stericycle
Considering the 90-day investment horizon Gfl Environmental is expected to generate 4.54 times less return on investment than Stericycle. But when comparing it to its historical volatility, Gfl Environmental Holdings is 3.91 times less risky than Stericycle. It trades about 0.23 of its potential returns per unit of risk. Stericycle is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 6,090 in Stericycle on August 24, 2024 and sell it today you would earn a total of 1,760 from holding Stericycle or generate 28.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 65.22% |
| Values | Daily Returns |
Gfl Environmental Holdings vs. Stericycle
Performance |
| Timeline |
| Gfl Environmental |
| Stericycle |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Gfl Environmental and Stericycle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gfl Environmental and Stericycle
The main advantage of trading using opposite Gfl Environmental and Stericycle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gfl Environmental position performs unexpectedly, Stericycle 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 Stericycle will offset losses from the drop in Stericycle's long position.| Gfl Environmental vs. Clean Harbors | Gfl Environmental vs. Waste Connections | Gfl Environmental vs. Republic Services | Gfl Environmental vs. Casella Waste Systems |
| Stericycle vs. Clean Harbors | Stericycle vs. Waste Connections | Stericycle vs. Casella Waste Systems | Stericycle vs. Montrose Environmental Grp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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