Correlation Between IDEX Metals and Gfl Environmental

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

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

Diversification Opportunities for IDEX Metals and Gfl Environmental

0.24

Correlation Coefficient

IDEX Metals  Gfl Environmental

Modest diversification

The 3 months correlation between IDEX and Gfl is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding IDEX Metals Corp and Gfl Environmental Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfl Environmental and IDEX Metals 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 IDEX Metals Corp 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 IDEX Metals i.e., IDEX Metals and Gfl Environmental go up and down completely randomly.

Pair Corralation between IDEX Metals and Gfl Environmental

Assuming the 90 days trading horizon IDEX Metals Corp is expected to under-perform the Gfl Environmental. In addition to that, IDEX Metals is 2.57 times more volatile than Gfl Environmental Holdings. It trades about -0.01 of its total potential returns per unit of risk. Gfl Environmental Holdings is currently generating about 0.01 per unit of volatility. If you would invest  6,506  in Gfl Environmental Holdings on April 20, 2025 and sell it today you would earn a total of  11.00  from holding Gfl Environmental Holdings or generate 0.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	44.44%
Values	Daily Returns

IDEX Metals Corp  vs.  Gfl Environmental Holdings

IDEX Metals Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days IDEX Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, IDEX Metals is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Gfl Environmental

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gfl Environmental Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Gfl Environmental is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with IDEX Metals and Gfl Environmental

The main advantage of trading using opposite IDEX Metals and Gfl Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDEX Metals 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 IDEX Metals Corp 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.