Correlation Between GP Investments and Bath Body
Can any of the company-specific risk be diversified away by investing in both GP Investments and Bath Body 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 GP Investments and Bath Body into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GP Investments and Bath Body Works, you can compare the effects of market volatilities on GP Investments and Bath Body 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 GP Investments with a short position of Bath Body. Check out your portfolio center. Please also check ongoing floating volatility patterns of GP Investments and Bath Body.
Diversification Opportunities for GP Investments and Bath Body
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GPIV33 and Bath is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding GP Investments and Bath Body Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bath Body Works and GP Investments 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 GP Investments are associated (or correlated) with Bath Body. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bath Body Works has no effect on the direction of GP Investments i.e., GP Investments and Bath Body go up and down completely randomly.
Pair Corralation between GP Investments and Bath Body
Assuming the 90 days trading horizon GP Investments is expected to generate 1.07 times less return on investment than Bath Body. But when comparing it to its historical volatility, GP Investments is 1.22 times less risky than Bath Body. It trades about 0.03 of its potential returns per unit of risk. Bath Body Works is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,802 in Bath Body Works on September 12, 2024 and sell it today you would earn a total of 97.00 from holding Bath Body Works or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 43.43% |
| Values | Daily Returns |
GP Investments vs. Bath Body Works
Performance |
| Timeline |
| GP Investments |
| Bath Body Works |
GP Investments and Bath Body Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GP Investments and Bath Body
The main advantage of trading using opposite GP Investments and Bath Body positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GP Investments position performs unexpectedly, Bath Body 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 Bath Body will offset losses from the drop in Bath Body's long position.| GP Investments vs. The Bank of | GP Investments vs. Ameriprise Financial | GP Investments vs. Banco BTG Pactual | GP Investments vs. Banco BTG Pactual |
| Bath Body vs. Teladoc Health | Bath Body vs. United Rentals | Bath Body vs. Charter Communications | Bath Body vs. GP Investments |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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