Correlation Between IA Financial and Gfl Environmental
Can any of the company-specific risk be diversified away by investing in both IA Financial 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 IA Financial and Gfl Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iA Financial and Gfl Environmental Holdings, you can compare the effects of market volatilities on IA Financial 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 IA Financial with a short position of Gfl Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of IA Financial and Gfl Environmental.
Diversification Opportunities for IA Financial and Gfl Environmental
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IAG and Gfl is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding iA Financial and Gfl Environmental Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfl Environmental and IA Financial 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 iA Financial 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 IA Financial i.e., IA Financial and Gfl Environmental go up and down completely randomly.
Pair Corralation between IA Financial and Gfl Environmental
Assuming the 90 days trading horizon iA Financial is expected to generate 0.74 times more return on investment than Gfl Environmental. However, iA Financial is 1.35 times less risky than Gfl Environmental. It trades about -0.11 of its potential returns per unit of risk. Gfl Environmental Holdings is currently generating about -0.29 per unit of risk. If you would invest 13,339 in iA Financial on October 22, 2024 and sell it today you would lose (224.00) from holding iA Financial or give up 1.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iA Financial vs. Gfl Environmental Holdings
Performance |
| Timeline |
| iA Financial |
| Gfl Environmental |
IA Financial and Gfl Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IA Financial and Gfl Environmental
The main advantage of trading using opposite IA Financial and Gfl Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IA Financial 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.| IA Financial vs. Great West Lifeco | IA Financial vs. Intact Financial | IA Financial vs. IGM Financial | IA Financial vs. Sun Life Financial |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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