Correlation Between BGC and Gap,
Can any of the company-specific risk be diversified away by investing in both BGC and Gap, 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 BGC and Gap, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BGC Group and The Gap,, you can compare the effects of market volatilities on BGC and Gap, 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 BGC with a short position of Gap,. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGC and Gap,.
Diversification Opportunities for BGC and Gap,
Average diversification
The 3 months correlation between BGC and Gap, is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding BGC Group and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, and BGC 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 BGC Group are associated (or correlated) with Gap,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gap, has no effect on the direction of BGC i.e., BGC and Gap, go up and down completely randomly.
Pair Corralation between BGC and Gap,
Considering the 90-day investment horizon BGC Group is expected to generate 0.73 times more return on investment than Gap,. However, BGC Group is 1.37 times less risky than Gap,. It trades about 0.06 of its potential returns per unit of risk. The Gap, is currently generating about -0.01 per unit of risk. If you would invest 843.00 in BGC Group on September 2, 2024 and sell it today you would earn a total of 131.00 from holding BGC Group or generate 15.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGC Group vs. The Gap,
Performance |
| Timeline |
| BGC Group |
| Gap, |
BGC and Gap, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGC and Gap,
The main advantage of trading using opposite BGC and Gap, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGC position performs unexpectedly, Gap, 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 Gap, will offset losses from the drop in Gap,'s long position.| BGC vs. BTB Real Estate | BGC vs. Old Republic International | BGC vs. Bank of America | BGC vs. FactSet Research Systems |
| Gap, vs. Boot Barn Holdings | Gap, vs. BJs Restaurants | Gap, vs. The Cheesecake Factory | Gap, vs. GEN Restaurant 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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