Correlation Between Gfl Environmental and Bce

Can any of the company-specific risk be diversified away by investing in both Gfl Environmental and Bce 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 Bce 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 Bce Inc Pref, you can compare the effects of market volatilities on Gfl Environmental and Bce 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 Bce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gfl Environmental and Bce.

Diversification Opportunities for Gfl Environmental and Bce

-0.9

Correlation Coefficient

Gfl Environmental  Bce

Pay attention - limited upside

The 3 months correlation between Gfl and Bce is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Gfl Environmental Holdings and Bce Inc Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bce Inc Pref 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 Bce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bce Inc Pref has no effect on the direction of Gfl Environmental i.e., Gfl Environmental and Bce go up and down completely randomly.

Pair Corralation between Gfl Environmental and Bce

Assuming the 90 days trading horizon Gfl Environmental Holdings is expected to under-perform the Bce. In addition to that, Gfl Environmental is 1.57 times more volatile than Bce Inc Pref. It trades about -0.11 of its total potential returns per unit of risk. Bce Inc Pref is currently generating about 0.22 per unit of volatility. If you would invest  1,589  in Bce Inc Pref on October 4, 2024 and sell it today you would earn a total of  49.00  from holding Bce Inc Pref or generate 3.08% return on investment over 90 days.

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

Gfl Environmental Holdings  vs.  Bce Inc Pref

Gfl Environmental

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gfl Environmental Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Gfl Environmental displayed solid returns over the last few months and may actually be approaching a breakup point.

Bce Inc Pref

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bce Inc Pref has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Bce is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gfl Environmental and Bce

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

The idea behind Gfl Environmental Holdings and Bce Inc Pref 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..