Correlation Between Gfl Environmental and Allegheny Technologies

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

Diversification Opportunities for Gfl Environmental and Allegheny Technologies

-0.6

Correlation Coefficient

Gfl Environmental  Allegheny Technologies

Excellent diversification

The 3 months correlation between Gfl and Allegheny is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Gfl Environmental Holdings and Allegheny Technologies Incorpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegheny Technologies 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 Allegheny Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegheny Technologies has no effect on the direction of Gfl Environmental i.e., Gfl Environmental and Allegheny Technologies go up and down completely randomly.

Pair Corralation between Gfl Environmental and Allegheny Technologies

Considering the 90-day investment horizon Gfl Environmental Holdings is expected to under-perform the Allegheny Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Gfl Environmental Holdings is 2.0 times less risky than Allegheny Technologies. The stock trades about -0.02 of its potential returns per unit of risk. The Allegheny Technologies Incorporated is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  6,976  in Allegheny Technologies Incorporated on May 7, 2025 and sell it today you would earn a total of  471.00  from holding Allegheny Technologies Incorporated or generate 6.75% return on investment over 90 days.

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

Gfl Environmental Holdings  vs.  Allegheny Technologies Incorpo

Gfl Environmental

Risk-Adjusted Performance

Weakest

Over the last 90 days Gfl Environmental Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Gfl Environmental is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Allegheny Technologies

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Allegheny Technologies Incorporated are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Allegheny Technologies may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Gfl Environmental and Allegheny Technologies

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

The idea behind Gfl Environmental Holdings and Allegheny Technologies Incorporated 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.