Correlation Between Pentagon I and Gfl Environmental
Can any of the company-specific risk be diversified away by investing in both Pentagon I 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 Pentagon I and Gfl Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pentagon I Capital and Gfl Environmental Holdings, you can compare the effects of market volatilities on Pentagon I 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 Pentagon I with a short position of Gfl Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pentagon I and Gfl Environmental.
Diversification Opportunities for Pentagon I and Gfl Environmental
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pentagon and Gfl is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Pentagon I Capital and Gfl Environmental Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfl Environmental and Pentagon I 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 Pentagon I Capital 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 Pentagon I i.e., Pentagon I and Gfl Environmental go up and down completely randomly.
Pair Corralation between Pentagon I and Gfl Environmental
Assuming the 90 days trading horizon Pentagon I Capital is expected to under-perform the Gfl Environmental. In addition to that, Pentagon I is 12.74 times more volatile than Gfl Environmental Holdings. It trades about -0.09 of its total potential returns per unit of risk. Gfl Environmental Holdings is currently generating about 0.05 per unit of volatility. If you would invest 6,314 in Gfl Environmental Holdings on September 19, 2024 and sell it today you would earn a total of 66.00 from holding Gfl Environmental Holdings or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pentagon I Capital vs. Gfl Environmental Holdings
Performance |
| Timeline |
| Pentagon I Capital |
| Gfl Environmental |
Pentagon I and Gfl Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pentagon I and Gfl Environmental
The main advantage of trading using opposite Pentagon I and Gfl Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pentagon I 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.| Pentagon I vs. Berkshire Hathaway CDR | Pentagon I vs. E L Financial Corp | Pentagon I vs. E L Financial 3 | Pentagon I vs. Molson Coors Canada |
| Gfl Environmental vs. Cielo Waste Solutions | Gfl Environmental vs. iShares Canadian HYBrid | Gfl Environmental vs. Altagas Cum Red | Gfl Environmental vs. European Residential Real |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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