Correlation Between Gfl Environmental and OriginClear

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

Diversification Opportunities for Gfl Environmental and OriginClear

-0.24

Correlation Coefficient

Gfl Environmental  OriginClear

Very good diversification

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

Pair Corralation between Gfl Environmental and OriginClear

Considering the 90-day investment horizon Gfl Environmental Holdings is expected to generate 0.14 times more return on investment than OriginClear. However, Gfl Environmental Holdings is 6.96 times less risky than OriginClear. It trades about 0.1 of its potential returns per unit of risk. OriginClear is currently generating about 0.01 per unit of risk. If you would invest  4,434  in Gfl Environmental Holdings on December 28, 2024 and sell it today you would earn a total of  401.00  from holding Gfl Environmental Holdings or generate 9.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Gfl Environmental Holdings  vs.  OriginClear

Gfl Environmental

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gfl Environmental Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, Gfl Environmental may actually be approaching a critical reversion point that can send shares even higher in April 2025.

OriginClear

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in OriginClear are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile essential indicators, OriginClear may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Gfl Environmental and OriginClear

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

The idea behind Gfl Environmental Holdings and OriginClear 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.