Correlation Between Foot Locker and Gogoro
Can any of the company-specific risk be diversified away by investing in both Foot Locker and Gogoro 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 Foot Locker and Gogoro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foot Locker and Gogoro Inc, you can compare the effects of market volatilities on Foot Locker and Gogoro 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 Foot Locker with a short position of Gogoro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foot Locker and Gogoro.
Diversification Opportunities for Foot Locker and Gogoro
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Foot and Gogoro is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Foot Locker and Gogoro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gogoro Inc and Foot Locker 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 Foot Locker are associated (or correlated) with Gogoro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gogoro Inc has no effect on the direction of Foot Locker i.e., Foot Locker and Gogoro go up and down completely randomly.
Pair Corralation between Foot Locker and Gogoro
Allowing for the 90-day total investment horizon Foot Locker is expected to generate 0.86 times more return on investment than Gogoro. However, Foot Locker is 1.16 times less risky than Gogoro. It trades about 0.0 of its potential returns per unit of risk. Gogoro Inc is currently generating about -0.06 per unit of risk. If you would invest 3,590 in Foot Locker on August 30, 2024 and sell it today you would lose (1,059) from holding Foot Locker or give up 29.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Foot Locker vs. Gogoro Inc
Performance |
| Timeline |
| Foot Locker |
| Gogoro Inc |
Foot Locker and Gogoro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foot Locker and Gogoro
The main advantage of trading using opposite Foot Locker and Gogoro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foot Locker position performs unexpectedly, Gogoro 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 Gogoro will offset losses from the drop in Gogoro's long position.| Foot Locker vs. Abercrombie Fitch | Foot Locker vs. Urban Outfitters | Foot Locker vs. Childrens Place | Foot Locker vs. American Eagle Outfitters |
| Gogoro vs. Motorcar Parts of | Gogoro vs. Stoneridge | Gogoro vs. Superior Industries International | Gogoro vs. Lear Corporation |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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