Correlation Between NIKE and Gfl Environmental
Can any of the company-specific risk be diversified away by investing in both NIKE 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 NIKE and Gfl Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIKE Inc CDR and Gfl Environmental Holdings, you can compare the effects of market volatilities on NIKE 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 NIKE with a short position of Gfl Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIKE and Gfl Environmental.
Diversification Opportunities for NIKE and Gfl Environmental
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NIKE and Gfl is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding NIKE Inc CDR and Gfl Environmental Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfl Environmental and NIKE 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 NIKE Inc CDR 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 NIKE i.e., NIKE and Gfl Environmental go up and down completely randomly.
Pair Corralation between NIKE and Gfl Environmental
Assuming the 90 days trading horizon NIKE is expected to generate 4.67 times less return on investment than Gfl Environmental. But when comparing it to its historical volatility, NIKE Inc CDR is 1.04 times less risky than Gfl Environmental. It trades about 0.08 of its potential returns per unit of risk. Gfl Environmental Holdings is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 5,750 in Gfl Environmental Holdings on September 4, 2024 and sell it today you would earn a total of 805.00 from holding Gfl Environmental Holdings or generate 14.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
NIKE Inc CDR vs. Gfl Environmental Holdings
Performance |
| Timeline |
| NIKE Inc CDR |
| Gfl Environmental |
NIKE and Gfl Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIKE and Gfl Environmental
The main advantage of trading using opposite NIKE and Gfl Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIKE 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.| NIKE vs. Gfl Environmental Holdings | NIKE vs. Falcon Energy Materials | NIKE vs. First National Financial | NIKE vs. Intact Financial Corp |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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