Correlation Between Gap, and SWK Holdings
Can any of the company-specific risk be diversified away by investing in both Gap, and SWK Holdings 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 SWK Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gap, and SWK Holdings, you can compare the effects of market volatilities on Gap, and SWK Holdings 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 SWK Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gap, and SWK Holdings.
Diversification Opportunities for Gap, and SWK Holdings
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gap, and SWK is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, and SWK Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWK Holdings 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 SWK Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWK Holdings has no effect on the direction of Gap, i.e., Gap, and SWK Holdings go up and down completely randomly.
Pair Corralation between Gap, and SWK Holdings
Considering the 90-day investment horizon The Gap, is expected to under-perform the SWK Holdings. In addition to that, Gap, is 7.78 times more volatile than SWK Holdings. It trades about -0.03 of its total potential returns per unit of risk. SWK Holdings is currently generating about 0.12 per unit of volatility. If you would invest 2,412 in SWK Holdings on August 29, 2024 and sell it today you would earn a total of 139.00 from holding SWK Holdings or generate 5.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gap, vs. SWK Holdings
Performance |
| Timeline |
| Gap, |
| SWK Holdings |
Gap, and SWK Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gap, and SWK Holdings
The main advantage of trading using opposite Gap, and SWK Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gap, position performs unexpectedly, SWK Holdings 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 SWK Holdings will offset losses from the drop in SWK Holdings' long position.| Gap, vs. Sphere Entertainment Co | Gap, vs. Rumble Inc | Gap, vs. FactSet Research Systems | Gap, vs. Asure Software |
| SWK Holdings vs. PACCAR Inc | SWK Holdings vs. Pure Cycle | SWK Holdings vs. Adient PLC | SWK Holdings vs. Kenon Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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