Correlation Between Salesforce and Gfl Environmental

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

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

Diversification Opportunities for Salesforce and Gfl Environmental

-0.57

Correlation Coefficient

Salesforce  Gfl Environmental

Excellent diversification

The 3 months correlation between Salesforce and Gfl is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Gfl Environmental Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfl Environmental and Salesforce 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 Salesforce 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 Salesforce i.e., Salesforce and Gfl Environmental go up and down completely randomly.

Pair Corralation between Salesforce and Gfl Environmental

Considering the 90-day investment horizon Salesforce is expected to under-perform the Gfl Environmental. In addition to that, Salesforce is 1.06 times more volatile than Gfl Environmental Holdings. It trades about -0.15 of its total potential returns per unit of risk. Gfl Environmental Holdings is currently generating about 0.09 per unit of volatility. If you would invest  4,369  in Gfl Environmental Holdings on January 14, 2025 and sell it today you would earn a total of  526.00  from holding Gfl Environmental Holdings or generate 12.04% return on investment over 90 days.

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

Salesforce  vs.  Gfl Environmental Holdings

Salesforce

Risk-Adjusted Performance

Very Weak

Over the last 90 days Salesforce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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 disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Salesforce and Gfl Environmental

The main advantage of trading using opposite Salesforce and Gfl Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce 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 Salesforce 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.