Correlation Between High Liner and Gfl Environmental
Can any of the company-specific risk be diversified away by investing in both High Liner and Gfl Environmental 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 High Liner and Gfl Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Liner Foods and Gfl Environmental Holdings, you can compare the effects of market volatilities on High Liner and Gfl Environmental 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 High Liner with a short position of Gfl Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and Gfl Environmental.
Diversification Opportunities for High Liner and Gfl Environmental
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between High and Gfl is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and Gfl Environmental Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfl Environmental and High Liner 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 High Liner Foods are associated (or correlated) with Gfl Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gfl Environmental has no effect on the direction of High Liner i.e., High Liner and Gfl Environmental go up and down completely randomly.
Pair Corralation between High Liner and Gfl Environmental
Assuming the 90 days trading horizon High Liner is expected to generate 2.26 times less return on investment than Gfl Environmental. In addition to that, High Liner is 1.01 times more volatile than Gfl Environmental Holdings. It trades about 0.03 of its total potential returns per unit of risk. Gfl Environmental Holdings is currently generating about 0.07 per unit of volatility. If you would invest 3,978 in Gfl Environmental Holdings on September 3, 2024 and sell it today you would earn a total of 2,663 from holding Gfl Environmental Holdings or generate 66.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Liner Foods vs. Gfl Environmental Holdings
Performance |
| Timeline |
| High Liner Foods |
| Gfl Environmental |
High Liner and Gfl Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and Gfl Environmental
The main advantage of trading using opposite High Liner and Gfl Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner position performs unexpectedly, Gfl Environmental 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 Gfl Environmental will offset losses from the drop in Gfl Environmental's long position.| High Liner vs. Leons Furniture Limited | High Liner vs. Autocanada | High Liner vs. Maple Leaf Foods | High Liner vs. Premium Brands Holdings |
| Gfl Environmental vs. Waste Connections | Gfl Environmental vs. TFI International | Gfl Environmental vs. WSP Global | Gfl Environmental vs. Dye Durham |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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