Correlation Between Gulf Island and ADF
Can any of the company-specific risk be diversified away by investing in both Gulf Island and ADF 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 Gulf Island and ADF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gulf Island Fabrication and ADF Group, you can compare the effects of market volatilities on Gulf Island and ADF 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 Gulf Island with a short position of ADF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Island and ADF.
Diversification Opportunities for Gulf Island and ADF
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gulf and ADF is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Island Fabrication and ADF Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADF Group and Gulf Island 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 Gulf Island Fabrication are associated (or correlated) with ADF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADF Group has no effect on the direction of Gulf Island i.e., Gulf Island and ADF go up and down completely randomly.
Pair Corralation between Gulf Island and ADF
Given the investment horizon of 90 days Gulf Island Fabrication is expected to generate 0.79 times more return on investment than ADF. However, Gulf Island Fabrication is 1.26 times less risky than ADF. It trades about 0.08 of its potential returns per unit of risk. ADF Group is currently generating about 0.05 per unit of risk. If you would invest 426.00 in Gulf Island Fabrication on September 4, 2024 and sell it today you would earn a total of 283.00 from holding Gulf Island Fabrication or generate 66.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.98% |
| Values | Daily Returns |
Gulf Island Fabrication vs. ADF Group
Performance |
| Timeline |
| Gulf Island Fabrication |
| ADF Group |
Gulf Island and ADF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulf Island and ADF
The main advantage of trading using opposite Gulf Island and ADF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Island position performs unexpectedly, ADF 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 ADF will offset losses from the drop in ADF's long position.| Gulf Island vs. Insteel Industries | Gulf Island vs. Mayville Engineering Co | Gulf Island vs. ESAB Corp | Gulf Island vs. Northwest Pipe |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |