Correlation Between GFL and IdeaForge Technology

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

By analyzing existing cross correlation between GFL Limited and ideaForge Technology Limited, you can compare the effects of market volatilities on GFL and IdeaForge Technology 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 with a short position of IdeaForge Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of GFL and IdeaForge Technology.

Diversification Opportunities for GFL and IdeaForge Technology

0.58

Correlation Coefficient

GFL  IdeaForge Technology

Very weak diversification

The 3 months correlation between GFL and IdeaForge is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding GFL Limited and ideaForge Technology Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ideaForge Technology and GFL 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 Limited are associated (or correlated) with IdeaForge Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ideaForge Technology has no effect on the direction of GFL i.e., GFL and IdeaForge Technology go up and down completely randomly.

Pair Corralation between GFL and IdeaForge Technology

Assuming the 90 days trading horizon GFL is expected to generate 1.12 times less return on investment than IdeaForge Technology. But when comparing it to its historical volatility, GFL Limited is 1.61 times less risky than IdeaForge Technology. It trades about 0.09 of its potential returns per unit of risk. ideaForge Technology Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  38,445  in ideaForge Technology Limited on May 5, 2025 and sell it today you would earn a total of  4,840  from holding ideaForge Technology Limited or generate 12.59% return on investment over 90 days.

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

GFL Limited  vs.  ideaForge Technology Limited

GFL Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GFL Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, GFL demonstrated solid returns over the last few months and may actually be approaching a breakup point.

ideaForge Technology

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ideaForge Technology Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, IdeaForge Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GFL and IdeaForge Technology

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

The idea behind GFL Limited and ideaForge Technology Limited 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.