Correlation Between Forestar and GGE Old
Can any of the company-specific risk be diversified away by investing in both Forestar and GGE Old 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 Forestar and GGE Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forestar Group and GGE Old, you can compare the effects of market volatilities on Forestar and GGE Old 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 Forestar with a short position of GGE Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forestar and GGE Old.
Diversification Opportunities for Forestar and GGE Old
Average diversification
The 3 months correlation between Forestar and GGE is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Forestar Group and GGE Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GGE Old and Forestar 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 Forestar Group are associated (or correlated) with GGE Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GGE Old has no effect on the direction of Forestar i.e., Forestar and GGE Old go up and down completely randomly.
Pair Corralation between Forestar and GGE Old
If you would invest 193.00 in GGE Old on August 28, 2024 and sell it today you would earn a total of 0.00 from holding GGE Old or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Forestar Group vs. GGE Old
Performance |
| Timeline |
| Forestar Group |
| GGE Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Forestar and GGE Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forestar and GGE Old
The main advantage of trading using opposite Forestar and GGE Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forestar position performs unexpectedly, GGE Old 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 GGE Old will offset losses from the drop in GGE Old's long position.| Forestar vs. American Realty Investors | Forestar vs. Landsea Homes Corp | Forestar vs. Five Point Holdings | Forestar vs. AMREP |
| GGE Old vs. AMREP | GGE Old vs. Landsea Homes Corp | GGE Old vs. Forestar Group | GGE Old vs. American Realty Investors |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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