Correlation Between Gap, and Croghan Bancshares
Can any of the company-specific risk be diversified away by investing in both Gap, and Croghan Bancshares 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 Gap, and Croghan Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gap, and Croghan Bancshares, you can compare the effects of market volatilities on Gap, and Croghan Bancshares 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 Gap, with a short position of Croghan Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gap, and Croghan Bancshares.
Diversification Opportunities for Gap, and Croghan Bancshares
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gap, and Croghan is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, and Croghan Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Croghan Bancshares and Gap, 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 The Gap, are associated (or correlated) with Croghan Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Croghan Bancshares has no effect on the direction of Gap, i.e., Gap, and Croghan Bancshares go up and down completely randomly.
Pair Corralation between Gap, and Croghan Bancshares
Considering the 90-day investment horizon The Gap, is expected to generate 1.03 times more return on investment than Croghan Bancshares. However, Gap, is 1.03 times more volatile than Croghan Bancshares. It trades about 0.06 of its potential returns per unit of risk. Croghan Bancshares is currently generating about 0.01 per unit of risk. If you would invest 1,201 in The Gap, on September 5, 2024 and sell it today you would earn a total of 1,378 from holding The Gap, or generate 114.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 84.44% |
| Values | Daily Returns |
The Gap, vs. Croghan Bancshares
Performance |
| Timeline |
| Gap, |
| Croghan Bancshares |
Gap, and Croghan Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gap, and Croghan Bancshares
The main advantage of trading using opposite Gap, and Croghan Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gap, position performs unexpectedly, Croghan Bancshares 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 Croghan Bancshares will offset losses from the drop in Croghan Bancshares' long position.The idea behind The Gap, and Croghan Bancshares 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.| Croghan Bancshares vs. ATRenew Inc DRC | Croghan Bancshares vs. The Gap, | Croghan Bancshares vs. Lululemon Athletica | Croghan Bancshares vs. Amkor Technology |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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