Correlation Between Gfl Environmental and Resaas Services

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

Diversification Opportunities for Gfl Environmental and Resaas Services

-0.82

Correlation Coefficient

Gfl Environmental  Resaas Services

Pay attention - limited upside

The 3 months correlation between Gfl and Resaas is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Gfl Environmental Holdings and Resaas Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resaas Services 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 Resaas Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resaas Services has no effect on the direction of Gfl Environmental i.e., Gfl Environmental and Resaas Services go up and down completely randomly.

Pair Corralation between Gfl Environmental and Resaas Services

Assuming the 90 days trading horizon Gfl Environmental Holdings is expected to generate 0.18 times more return on investment than Resaas Services. However, Gfl Environmental Holdings is 5.43 times less risky than Resaas Services. It trades about 0.17 of its potential returns per unit of risk. Resaas Services is currently generating about 0.01 per unit of risk. If you would invest  5,565  in Gfl Environmental Holdings on October 11, 2024 and sell it today you would earn a total of  865.00  from holding Gfl Environmental Holdings or generate 15.54% 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.  Resaas Services

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.

Resaas Services

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Resaas Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unfluctuating basic indicators, Resaas Services may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Gfl Environmental and Resaas Services

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

The idea behind Gfl Environmental Holdings and Resaas Services 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..