Correlation Between Gfl Environmental and Waste Management
Can any of the company-specific risk be diversified away by investing in both Gfl Environmental and Waste Management 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 Waste Management 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 Waste Management, you can compare the effects of market volatilities on Gfl Environmental and Waste Management 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 Waste Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gfl Environmental and Waste Management.
Diversification Opportunities for Gfl Environmental and Waste Management
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gfl and Waste is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Gfl Environmental Holdings and Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management 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 Waste Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Management has no effect on the direction of Gfl Environmental i.e., Gfl Environmental and Waste Management go up and down completely randomly.
Pair Corralation between Gfl Environmental and Waste Management
Considering the 90-day investment horizon Gfl Environmental Holdings is expected to generate 1.27 times more return on investment than Waste Management. However, Gfl Environmental is 1.27 times more volatile than Waste Management. It trades about 0.23 of its potential returns per unit of risk. Waste Management is currently generating about 0.14 per unit of risk. If you would invest 4,169 in Gfl Environmental Holdings on August 24, 2024 and sell it today you would earn a total of 408.00 from holding Gfl Environmental Holdings or generate 9.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gfl Environmental Holdings vs. Waste Management
Performance |
| Timeline |
| Gfl Environmental |
| Waste Management |
Gfl Environmental and Waste Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gfl Environmental and Waste Management
The main advantage of trading using opposite Gfl Environmental and Waste Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gfl Environmental position performs unexpectedly, Waste Management 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 Waste Management will offset losses from the drop in Waste Management's long position.| Gfl Environmental vs. Pro Dex | Gfl Environmental vs. Pure Cycle | Gfl Environmental vs. Quest Resource Holding | Gfl Environmental vs. ABIVAX Socit Anonyme |
| Waste Management vs. Waste Connections | Waste Management vs. Clean Harbors | Waste Management vs. Casella Waste Systems | Waste Management 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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