Correlation Between Tianjin Capital and Gfl Environmental

Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and Gfl Environmental 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 Tianjin Capital and Gfl Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tianjin Capital Environmental and Gfl Environmental Holdings, you can compare the effects of market volatilities on Tianjin Capital and Gfl Environmental 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 Tianjin Capital with a short position of Gfl Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and Gfl Environmental.

Diversification Opportunities for Tianjin Capital and Gfl Environmental

0.7

Correlation Coefficient

Tianjin Capital  Gfl Environmental

Poor diversification

The 3 months correlation between Tianjin and Gfl is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and Gfl Environmental Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfl Environmental and Tianjin Capital 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 Tianjin Capital Environmental are associated (or correlated) with Gfl Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gfl Environmental has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and Gfl Environmental go up and down completely randomly.

Pair Corralation between Tianjin Capital and Gfl Environmental

If you would invest  38.00  in Tianjin Capital Environmental on October 20, 2024 and sell it today you would earn a total of  0.00  from holding Tianjin Capital Environmental or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.0%
Values	Daily Returns

Tianjin Capital Environmental  vs.  Gfl Environmental Holdings

Tianjin Capital Envi

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tianjin Capital Environmental are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward indicators, Tianjin Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Gfl Environmental

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gfl Environmental Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, Gfl Environmental is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Tianjin Capital and Gfl Environmental

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

The idea behind Tianjin Capital Environmental and Gfl Environmental Holdings 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.