Correlation Between Gfl Environmental and Cybin

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

Diversification Opportunities for Gfl Environmental and Cybin

0.66

Correlation Coefficient

Gfl Environmental  Cybin

Poor diversification

The 3 months correlation between Gfl and Cybin is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Gfl Environmental Holdings and Cybin Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cybin Inc 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 Cybin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cybin Inc has no effect on the direction of Gfl Environmental i.e., Gfl Environmental and Cybin go up and down completely randomly.

Pair Corralation between Gfl Environmental and Cybin

Assuming the 90 days trading horizon Gfl Environmental is expected to generate 2.07 times less return on investment than Cybin. But when comparing it to its historical volatility, Gfl Environmental Holdings is 3.6 times less risky than Cybin. It trades about 0.21 of its potential returns per unit of risk. Cybin Inc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,026  in Cybin Inc on September 17, 2024 and sell it today you would earn a total of  368.00  from holding Cybin Inc or generate 35.87% return on investment over 90 days.

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

Gfl Environmental Holdings  vs.  Cybin Inc

Gfl Environmental

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gfl Environmental Holdings are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Gfl Environmental displayed solid returns over the last few months and may actually be approaching a breakup point.

Cybin Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cybin Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, Cybin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gfl Environmental and Cybin

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

The idea behind Gfl Environmental Holdings and Cybin Inc 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.