Correlation Between Gap, and Global Partner
Can any of the company-specific risk be diversified away by investing in both Gap, and Global Partner 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 Global Partner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gap, and Global Partner Acq, you can compare the effects of market volatilities on Gap, and Global Partner 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 Global Partner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gap, and Global Partner.
Diversification Opportunities for Gap, and Global Partner
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gap, and Global is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, and Global Partner Acq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Partner Acq 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 Global Partner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Partner Acq has no effect on the direction of Gap, i.e., Gap, and Global Partner go up and down completely randomly.
Pair Corralation between Gap, and Global Partner
Considering the 90-day investment horizon The Gap, is expected to generate 3.05 times more return on investment than Global Partner. However, Gap, is 3.05 times more volatile than Global Partner Acq. It trades about 0.03 of its potential returns per unit of risk. Global Partner Acq is currently generating about -0.06 per unit of risk. If you would invest 2,102 in The Gap, on September 14, 2024 and sell it today you would earn a total of 310.50 from holding The Gap, or generate 14.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 55.42% |
| Values | Daily Returns |
The Gap, vs. Global Partner Acq
Performance |
| Timeline |
| Gap, |
| Global Partner Acq |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Gap, and Global Partner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gap, and Global Partner
The main advantage of trading using opposite Gap, and Global Partner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gap, position performs unexpectedly, Global Partner 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 Global Partner will offset losses from the drop in Global Partner's long position.| Gap, vs. Mesa Air Group | Gap, vs. Southwest Airlines | Gap, vs. Brenmiller Energy Ltd | Gap, vs. Delta Air Lines |
| Global Partner vs. National Beverage Corp | Global Partner vs. IPG Photonics | Global Partner vs. Amkor Technology | Global Partner vs. Fomento Economico Mexicano |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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