Correlation Between InPlay Oil and GFL ENVIRONM(SUBVTSH

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

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

Diversification Opportunities for InPlay Oil and GFL ENVIRONM(SUBVTSH

0.11

Correlation Coefficient

InPlay Oil  GFL ENVIRONM(SUBVTSH

Average diversification

The 3 months correlation between InPlay and GFL is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and GFL ENVIRONM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFL ENVIRONM(SUBVTSH and InPlay Oil 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 InPlay Oil Corp are associated (or correlated) with GFL ENVIRONM(SUBVTSH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFL ENVIRONM(SUBVTSH has no effect on the direction of InPlay Oil i.e., InPlay Oil and GFL ENVIRONM(SUBVTSH go up and down completely randomly.

Pair Corralation between InPlay Oil and GFL ENVIRONM(SUBVTSH

Assuming the 90 days trading horizon InPlay Oil Corp is expected to under-perform the GFL ENVIRONM(SUBVTSH. In addition to that, InPlay Oil is 1.65 times more volatile than GFL ENVIRONM. It trades about -0.06 of its total potential returns per unit of risk. GFL ENVIRONM is currently generating about 0.01 per unit of volatility. If you would invest  4,419  in GFL ENVIRONM on December 5, 2024 and sell it today you would earn a total of  1.00  from holding GFL ENVIRONM or generate 0.02% return on investment over 90 days.

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

InPlay Oil Corp  vs.  GFL ENVIRONM

InPlay Oil Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days InPlay Oil Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

GFL ENVIRONM(SUBVTSH

Risk-Adjusted Performance

Very Weak

Over the last 90 days GFL ENVIRONM has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, GFL ENVIRONM(SUBVTSH is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with InPlay Oil and GFL ENVIRONM(SUBVTSH

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

The idea behind InPlay Oil Corp and GFL ENVIRONM 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.