Correlation Between Gfl Environmental and Batero Gold

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

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

Diversification Opportunities for Gfl Environmental and Batero Gold

-0.24

Correlation Coefficient

Gfl Environmental  Batero Gold

Very good diversification

The 3 months correlation between Gfl and Batero is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Gfl Environmental Holdings and Batero Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batero Gold Corp and Gfl Environmental 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 Environmental Holdings are associated (or correlated) with Batero Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batero Gold Corp has no effect on the direction of Gfl Environmental i.e., Gfl Environmental and Batero Gold go up and down completely randomly.

Pair Corralation between Gfl Environmental and Batero Gold

Assuming the 90 days trading horizon Gfl Environmental Holdings is expected to generate 0.1 times more return on investment than Batero Gold. However, Gfl Environmental Holdings is 10.4 times less risky than Batero Gold. It trades about -0.29 of its potential returns per unit of risk. Batero Gold Corp is currently generating about -0.08 per unit of risk. If you would invest  6,425  in Gfl Environmental Holdings on October 22, 2024 and sell it today you would lose (370.00) from holding Gfl Environmental Holdings or give up 5.76% of portfolio value over 90 days.

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

Gfl Environmental Holdings  vs.  Batero Gold Corp

Gfl Environmental

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gfl Environmental Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. 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.

Batero Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Batero Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Gfl Environmental and Batero Gold

The main advantage of trading using opposite Gfl Environmental and Batero Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gfl Environmental position performs unexpectedly, Batero Gold 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 Batero Gold will offset losses from the drop in Batero Gold's long position.

The idea behind Gfl Environmental Holdings and Batero Gold Corp 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.