Correlation Between CI Financial and Gfl Environmental

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

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

Diversification Opportunities for CI Financial and Gfl Environmental

-0.16

Correlation Coefficient

CI Financial  Gfl Environmental

Good diversification

The 3 months correlation between CIX and Gfl is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding CI Financial Corp and Gfl Environmental Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfl Environmental and CI Financial 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 CI Financial Corp 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 CI Financial i.e., CI Financial and Gfl Environmental go up and down completely randomly.

Pair Corralation between CI Financial and Gfl Environmental

Assuming the 90 days trading horizon CI Financial Corp is expected to generate 0.16 times more return on investment than Gfl Environmental. However, CI Financial Corp is 6.37 times less risky than Gfl Environmental. It trades about 0.12 of its potential returns per unit of risk. Gfl Environmental Holdings is currently generating about 0.0 per unit of risk. If you would invest  3,084  in CI Financial Corp on December 2, 2024 and sell it today you would earn a total of  54.00  from holding CI Financial Corp or generate 1.75% return on investment over 90 days.

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

CI Financial Corp  vs.  Gfl Environmental Holdings

CI Financial Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CI Financial Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CI Financial is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Gfl Environmental

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gfl Environmental Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Gfl Environmental is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CI Financial and Gfl Environmental

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

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.