Correlation Between Gfl Environmental and Emera Pref
Can any of the company-specific risk be diversified away by investing in both Gfl Environmental and Emera Pref 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 Emera Pref 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 Emera Pref A, you can compare the effects of market volatilities on Gfl Environmental and Emera Pref 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 Emera Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gfl Environmental and Emera Pref.
Diversification Opportunities for Gfl Environmental and Emera Pref
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gfl and Emera is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Gfl Environmental Holdings and Emera Pref A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emera Pref A 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 Emera Pref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emera Pref A has no effect on the direction of Gfl Environmental i.e., Gfl Environmental and Emera Pref go up and down completely randomly.
Pair Corralation between Gfl Environmental and Emera Pref
Assuming the 90 days trading horizon Gfl Environmental Holdings is expected to under-perform the Emera Pref. In addition to that, Gfl Environmental is 1.45 times more volatile than Emera Pref A. It trades about -0.06 of its total potential returns per unit of risk. Emera Pref A is currently generating about 0.07 per unit of volatility. If you would invest 1,596 in Emera Pref A on September 25, 2024 and sell it today you would earn a total of 19.00 from holding Emera Pref A or generate 1.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Gfl Environmental Holdings vs. Emera Pref A
Performance |
Timeline |
Gfl Environmental |
Emera Pref A |
Gfl Environmental and Emera Pref Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gfl Environmental and Emera Pref
The main advantage of trading using opposite Gfl Environmental and Emera Pref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gfl Environmental position performs unexpectedly, Emera Pref 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 Emera Pref will offset losses from the drop in Emera Pref's long position.Gfl Environmental vs. CHAR Technologies | Gfl Environmental vs. iShares Canadian HYBrid | Gfl Environmental vs. Altagas Cum Red | Gfl Environmental vs. European Residential Real |
Emera Pref vs. Algonquin Power Utilities | Emera Pref vs. Westshore Terminals Investment | Emera Pref vs. Converge Technology Solutions | Emera Pref vs. Bip Investment Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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