Correlation Between GFL ENVIRONM(SUBVTSH and Easy Software

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

By analyzing existing cross correlation between GFL ENVIRONM and Easy Software AG, you can compare the effects of market volatilities on GFL ENVIRONM(SUBVTSH and Easy Software 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 Easy Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of GFL ENVIRONM(SUBVTSH and Easy Software.

Diversification Opportunities for GFL ENVIRONM(SUBVTSH and Easy Software

0.32

Correlation Coefficient

GFL ENVIRONM(SUBVTSH  Easy Software

Weak diversification

The 3 months correlation between GFL and Easy is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding GFL ENVIRONM and Easy Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easy Software AG 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 Easy Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easy Software AG has no effect on the direction of GFL ENVIRONM(SUBVTSH i.e., GFL ENVIRONM(SUBVTSH and Easy Software go up and down completely randomly.

Pair Corralation between GFL ENVIRONM(SUBVTSH and Easy Software

Assuming the 90 days horizon GFL ENVIRONM(SUBVTSH is expected to generate 1.34 times less return on investment than Easy Software. But when comparing it to its historical volatility, GFL ENVIRONM is 1.39 times less risky than Easy Software. It trades about 0.17 of its potential returns per unit of risk. Easy Software AG is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,500  in Easy Software AG on October 6, 2024 and sell it today you would earn a total of  340.00  from holding Easy Software AG or generate 22.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

GFL ENVIRONM  vs.  Easy Software AG

GFL ENVIRONM(SUBVTSH

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GFL ENVIRONM are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, GFL ENVIRONM(SUBVTSH reported solid returns over the last few months and may actually be approaching a breakup point.

Easy Software AG

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Easy Software AG are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Easy Software displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GFL ENVIRONM(SUBVTSH and Easy Software

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

The idea behind GFL ENVIRONM and Easy Software AG 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.