Correlation Between CBIZ and Gfl Environmental

Can any of the company-specific risk be diversified away by investing in both CBIZ 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 CBIZ and Gfl Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CBIZ Inc and Gfl Environmental Holdings, you can compare the effects of market volatilities on CBIZ 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 CBIZ with a short position of Gfl Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBIZ and Gfl Environmental.

Diversification Opportunities for CBIZ and Gfl Environmental

-0.51

Correlation Coefficient

CBIZ  Gfl Environmental

Excellent diversification

The 3 months correlation between CBIZ and Gfl is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding CBIZ Inc and Gfl Environmental Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfl Environmental and CBIZ 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 CBIZ Inc 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 CBIZ i.e., CBIZ and Gfl Environmental go up and down completely randomly.

Pair Corralation between CBIZ and Gfl Environmental

Considering the 90-day investment horizon CBIZ Inc is expected to under-perform the Gfl Environmental. But the stock apears to be less risky and, when comparing its historical volatility, CBIZ Inc is 1.04 times less risky than Gfl Environmental. The stock trades about -0.11 of its potential returns per unit of risk. The Gfl Environmental Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  4,483  in Gfl Environmental Holdings on December 26, 2024 and sell it today you would earn a total of  379.00  from holding Gfl Environmental Holdings or generate 8.45% return on investment over 90 days.

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

CBIZ Inc  vs.  Gfl Environmental Holdings

CBIZ Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days CBIZ Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Gfl Environmental

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gfl Environmental Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, Gfl Environmental may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CBIZ and Gfl Environmental

The main advantage of trading using opposite CBIZ and Gfl Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBIZ 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.

The idea behind CBIZ Inc and Gfl Environmental Holdings 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.