Correlation Between Gfl Environmental and Cintas

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

Diversification Opportunities for Gfl Environmental and Cintas

-0.61

Correlation Coefficient

Gfl Environmental  Cintas

Excellent diversification

The 3 months correlation between Gfl and Cintas is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Gfl Environmental Holdings and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas 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 Cintas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cintas has no effect on the direction of Gfl Environmental i.e., Gfl Environmental and Cintas go up and down completely randomly.

Pair Corralation between Gfl Environmental and Cintas

Considering the 90-day investment horizon Gfl Environmental Holdings is expected to under-perform the Cintas. In addition to that, Gfl Environmental is 2.77 times more volatile than Cintas. It trades about -0.11 of its total potential returns per unit of risk. Cintas is currently generating about 0.01 per unit of volatility. If you would invest  67,369  in Cintas on February 5, 2024 and sell it today you would earn a total of  35.00  from holding Cintas or generate 0.05% return on investment over 90 days.

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

Gfl Environmental Holdings  vs.  Cintas

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 latest uncertain performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Cintas

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cintas are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Cintas may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Gfl Environmental and Cintas

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

The idea behind Gfl Environmental Holdings and Cintas 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.