Correlation Between Gfl Environmental and Oculus VisionTech

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

Diversification Opportunities for Gfl Environmental and Oculus VisionTech

-0.25

Correlation Coefficient

Gfl Environmental  Oculus VisionTech

Very good diversification

The 3 months correlation between Gfl and Oculus is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Gfl Environmental Holdings and Oculus VisionTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oculus VisionTech 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 Oculus VisionTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oculus VisionTech has no effect on the direction of Gfl Environmental i.e., Gfl Environmental and Oculus VisionTech go up and down completely randomly.

Pair Corralation between Gfl Environmental and Oculus VisionTech

Assuming the 90 days trading horizon Gfl Environmental Holdings is expected to generate 0.16 times more return on investment than Oculus VisionTech. However, Gfl Environmental Holdings is 6.2 times less risky than Oculus VisionTech. It trades about 0.09 of its potential returns per unit of risk. Oculus VisionTech is currently generating about 0.01 per unit of risk. If you would invest  6,428  in Gfl Environmental Holdings on December 26, 2024 and sell it today you would earn a total of  512.00  from holding Gfl Environmental Holdings or generate 7.97% return on investment over 90 days.

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

Gfl Environmental Holdings  vs.  Oculus VisionTech

Gfl Environmental

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gfl Environmental Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Gfl Environmental may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Oculus VisionTech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oculus VisionTech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Oculus VisionTech is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Gfl Environmental and Oculus VisionTech

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

The idea behind Gfl Environmental Holdings and Oculus VisionTech 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.