Correlation Between US Ecology and Gfl Environmental

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

By analyzing existing cross correlation between US Ecology and Gfl Environmental Holdings, you can compare the effects of market volatilities on US Ecology 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 US Ecology with a short position of Gfl Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Ecology and Gfl Environmental.

Diversification Opportunities for US Ecology and Gfl Environmental

0.19

Correlation Coefficient

US Ecology  Gfl Environmental

Average diversification

The 3 months correlation between ECOL and Gfl is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding US Ecology and Gfl Environmental Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfl Environmental and US Ecology 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 US Ecology 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 US Ecology i.e., US Ecology and Gfl Environmental go up and down completely randomly.

Pair Corralation between US Ecology and Gfl Environmental

If you would invest  4,799  in US Ecology on January 25, 2024 and sell it today you would earn a total of  0.00  from holding US Ecology or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

US Ecology  vs.  Gfl Environmental Holdings

US Ecology

Risk-Adjusted Performance

0 of 100

Very Weak

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

Gfl Environmental

Risk-Adjusted Performance

0 of 100

Very Weak

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 latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with US Ecology and Gfl Environmental

The main advantage of trading using opposite US Ecology and Gfl Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Ecology 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.

The idea behind US Ecology and Gfl Environmental Holdings 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.