Correlation Between Gfl Environmental and Tomra Systems
Can any of the company-specific risk be diversified away by investing in both Gfl Environmental and Tomra Systems 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 Tomra Systems 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 Tomra Systems ASA, you can compare the effects of market volatilities on Gfl Environmental and Tomra Systems 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 Tomra Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gfl Environmental and Tomra Systems.
Diversification Opportunities for Gfl Environmental and Tomra Systems
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gfl and Tomra is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Gfl Environmental Holdings and Tomra Systems ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tomra Systems ASA 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 Tomra Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tomra Systems ASA has no effect on the direction of Gfl Environmental i.e., Gfl Environmental and Tomra Systems go up and down completely randomly.
Pair Corralation between Gfl Environmental and Tomra Systems
Considering the 90-day investment horizon Gfl Environmental Holdings is expected to generate 1.3 times more return on investment than Tomra Systems. However, Gfl Environmental is 1.3 times more volatile than Tomra Systems ASA. It trades about 0.28 of its potential returns per unit of risk. Tomra Systems ASA is currently generating about -0.16 per unit of risk. If you would invest 4,102 in Gfl Environmental Holdings on August 25, 2024 and sell it today you would earn a total of 486.00 from holding Gfl Environmental Holdings or generate 11.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Gfl Environmental Holdings vs. Tomra Systems ASA
Performance |
| Timeline |
| Gfl Environmental |
| Tomra Systems ASA |
Gfl Environmental and Tomra Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gfl Environmental and Tomra Systems
The main advantage of trading using opposite Gfl Environmental and Tomra Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gfl Environmental position performs unexpectedly, Tomra Systems 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 Tomra Systems will offset losses from the drop in Tomra Systems' long position.| Gfl Environmental vs. Clean Harbors | Gfl Environmental vs. Waste Connections | Gfl Environmental vs. Republic Services | Gfl Environmental vs. Casella Waste Systems |
| Tomra Systems vs. Tomra Systems ASA | Tomra Systems vs. Novozymes AS B | Tomra Systems vs. Halma plc | Tomra Systems vs. Toromont Industries |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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