Correlation Between Sun Life and Gfl Environmental
Can any of the company-specific risk be diversified away by investing in both Sun Life 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 Sun Life and Gfl Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Life Non and Gfl Environmental Holdings, you can compare the effects of market volatilities on Sun Life 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 Sun Life with a short position of Gfl Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Gfl Environmental.
Diversification Opportunities for Sun Life and Gfl Environmental
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and Gfl is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Non and Gfl Environmental Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfl Environmental and Sun Life 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 Sun Life Non 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 Sun Life i.e., Sun Life and Gfl Environmental go up and down completely randomly.
Pair Corralation between Sun Life and Gfl Environmental
Assuming the 90 days trading horizon Sun Life Non is expected to under-perform the Gfl Environmental. But the preferred stock apears to be less risky and, when comparing its historical volatility, Sun Life Non is 2.18 times less risky than Gfl Environmental. The preferred stock trades about -0.02 of its potential returns per unit of risk. The Gfl Environmental Holdings is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 5,469 in Gfl Environmental Holdings on September 12, 2024 and sell it today you would earn a total of 1,046 from holding Gfl Environmental Holdings or generate 19.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sun Life Non vs. Gfl Environmental Holdings
Performance |
Timeline |
Sun Life Non |
Gfl Environmental |
Sun Life and Gfl Environmental Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sun Life and Gfl Environmental
The main advantage of trading using opposite Sun Life and Gfl Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life 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.Sun Life vs. Sun Life Financial | Sun Life vs. Sun Life Financial | Sun Life vs. Solar Alliance Energy | Sun Life vs. EcoSynthetix |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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