Correlation Between GFL ENVIRONM(SUBVTSH and Altia Oyj

Can any of the company-specific risk be diversified away by investing in both GFL ENVIRONM(SUBVTSH and Altia Oyj 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 ENVIRONM(SUBVTSH and Altia Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GFL ENVIRONM and Altia Oyj, you can compare the effects of market volatilities on GFL ENVIRONM(SUBVTSH and Altia Oyj 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 ENVIRONM(SUBVTSH with a short position of Altia Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of GFL ENVIRONM(SUBVTSH and Altia Oyj.

Diversification Opportunities for GFL ENVIRONM(SUBVTSH and Altia Oyj

-0.91

Correlation Coefficient

GFL ENVIRONM(SUBVTSH  Altia Oyj

Pay attention - limited upside

The 3 months correlation between GFL and Altia is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding GFL ENVIRONM and Altia Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altia Oyj and GFL ENVIRONM(SUBVTSH 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 ENVIRONM are associated (or correlated) with Altia Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altia Oyj has no effect on the direction of GFL ENVIRONM(SUBVTSH i.e., GFL ENVIRONM(SUBVTSH and Altia Oyj go up and down completely randomly.

Pair Corralation between GFL ENVIRONM(SUBVTSH and Altia Oyj

Assuming the 90 days horizon GFL ENVIRONM is expected to under-perform the Altia Oyj. But the stock apears to be less risky and, when comparing its historical volatility, GFL ENVIRONM is 4.38 times less risky than Altia Oyj. The stock trades about -0.16 of its potential returns per unit of risk. The Altia Oyj is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  277.00  in Altia Oyj on October 5, 2024 and sell it today you would earn a total of  15.00  from holding Altia Oyj or generate 5.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

GFL ENVIRONM  vs.  Altia Oyj

GFL ENVIRONM(SUBVTSH

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days GFL ENVIRONM has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, GFL ENVIRONM(SUBVTSH reported solid returns over the last few months and may actually be approaching a breakup point.

Altia Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altia Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with GFL ENVIRONM(SUBVTSH and Altia Oyj

The main advantage of trading using opposite GFL ENVIRONM(SUBVTSH and Altia Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GFL ENVIRONM(SUBVTSH position performs unexpectedly, Altia Oyj 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 Altia Oyj will offset losses from the drop in Altia Oyj's long position.

The idea behind GFL ENVIRONM and Altia Oyj pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.