Correlation Between Waste Management and Gfl Environmental
Can any of the company-specific risk be diversified away by investing in both Waste Management 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 Waste Management and Gfl Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Waste Management and Gfl Environmental Holdings, you can compare the effects of market volatilities on Waste Management 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 Waste Management with a short position of Gfl Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waste Management and Gfl Environmental.
Diversification Opportunities for Waste Management and Gfl Environmental
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Waste and Gfl is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Waste Management and Gfl Environmental Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfl Environmental and Waste Management 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 Waste Management 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 Waste Management i.e., Waste Management and Gfl Environmental go up and down completely randomly.
Pair Corralation between Waste Management and Gfl Environmental
Allowing for the 90-day total investment horizon Waste Management is expected to under-perform the Gfl Environmental. But the stock apears to be less risky and, when comparing its historical volatility, Waste Management is 1.27 times less risky than Gfl Environmental. The stock trades about -0.02 of its potential returns per unit of risk. The Gfl Environmental Holdings is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 5,122 in Gfl Environmental Holdings on May 7, 2025 and sell it today you would lose (72.00) from holding Gfl Environmental Holdings or give up 1.41% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Waste Management vs. Gfl Environmental Holdings
Performance |
Timeline |
Waste Management |
Gfl Environmental |
Waste Management and Gfl Environmental Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Waste Management and Gfl Environmental
The main advantage of trading using opposite Waste Management and Gfl Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waste Management 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.Waste Management vs. Clean Harbors | Waste Management vs. Casella Waste Systems | Waste Management vs. Gfl Environmental Holdings | Waste Management vs. 3M Company |
Gfl Environmental vs. Casella Waste Systems | Gfl Environmental vs. Waste Connections | Gfl Environmental vs. Montrose Environmental Grp | Gfl Environmental vs. Republic Services |
Check out your portfolio center.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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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