Correlation Between Gfl Environmental and Pitney Bowes
Can any of the company-specific risk be diversified away by investing in both Gfl Environmental and Pitney Bowes 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 Pitney Bowes 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 Pitney Bowes, you can compare the effects of market volatilities on Gfl Environmental and Pitney Bowes 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 Pitney Bowes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gfl Environmental and Pitney Bowes.
Diversification Opportunities for Gfl Environmental and Pitney Bowes
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gfl and Pitney is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Gfl Environmental Holdings and Pitney Bowes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pitney Bowes 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 Pitney Bowes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pitney Bowes has no effect on the direction of Gfl Environmental i.e., Gfl Environmental and Pitney Bowes go up and down completely randomly.
Pair Corralation between Gfl Environmental and Pitney Bowes
Considering the 90-day investment horizon Gfl Environmental Holdings is expected to under-perform the Pitney Bowes. But the stock apears to be less risky and, when comparing its historical volatility, Gfl Environmental Holdings is 3.36 times less risky than Pitney Bowes. The stock trades about -0.06 of its potential returns per unit of risk. The Pitney Bowes is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 417.00 in Pitney Bowes on February 4, 2024 and sell it today you would earn a total of 110.00 from holding Pitney Bowes or generate 26.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Gfl Environmental Holdings vs. Pitney Bowes
Performance |
Timeline |
Gfl Environmental |
Pitney Bowes |
Gfl Environmental and Pitney Bowes Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gfl Environmental and Pitney Bowes
The main advantage of trading using opposite Gfl Environmental and Pitney Bowes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gfl Environmental position performs unexpectedly, Pitney Bowes 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 Pitney Bowes will offset losses from the drop in Pitney Bowes' long position.The idea behind Gfl Environmental Holdings and Pitney Bowes 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.Pitney Bowes vs. Expeditors International of | Pitney Bowes vs. Landstar System | Pitney Bowes vs. JB Hunt Transport | Pitney Bowes vs. Hub Group |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Transaction History View history of all your transactions and understand their impact on performance | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |