Correlation Between Gfl Environmental and Phenixfin

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

Diversification Opportunities for Gfl Environmental and Phenixfin

0.01

Correlation Coefficient

Gfl Environmental  Phenixfin

Significant diversification

The 3 months correlation between Gfl and Phenixfin is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Gfl Environmental Holdings and Phenixfin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phenixfin 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 Phenixfin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phenixfin has no effect on the direction of Gfl Environmental i.e., Gfl Environmental and Phenixfin go up and down completely randomly.

Pair Corralation between Gfl Environmental and Phenixfin

Considering the 90-day investment horizon Gfl Environmental is expected to generate 1.62 times less return on investment than Phenixfin. But when comparing it to its historical volatility, Gfl Environmental Holdings is 1.34 times less risky than Phenixfin. It trades about 0.05 of its potential returns per unit of risk. Phenixfin is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  4,725  in Phenixfin on October 7, 2024 and sell it today you would earn a total of  175.00  from holding Phenixfin or generate 3.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.56%
Values	Daily Returns

Gfl Environmental Holdings  vs.  Phenixfin

Gfl Environmental

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gfl Environmental Holdings are ranked lower than 10 (%) 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 February 2025.

Phenixfin

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Phenixfin are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Phenixfin is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gfl Environmental and Phenixfin

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

The idea behind Gfl Environmental Holdings and Phenixfin 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.