Correlation Between GP Investments and CoStar
Can any of the company-specific risk be diversified away by investing in both GP Investments and CoStar 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 CoStar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GP Investments and CoStar Group, you can compare the effects of market volatilities on GP Investments and CoStar 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 CoStar. Check out your portfolio center. Please also check ongoing floating volatility patterns of GP Investments and CoStar.
Diversification Opportunities for GP Investments and CoStar
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GPIV33 and CoStar is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding GP Investments and CoStar Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoStar Group 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 CoStar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoStar Group has no effect on the direction of GP Investments i.e., GP Investments and CoStar go up and down completely randomly.
Pair Corralation between GP Investments and CoStar
Assuming the 90 days trading horizon GP Investments is expected to generate 1.28 times more return on investment than CoStar. However, GP Investments is 1.28 times more volatile than CoStar Group. It trades about 0.08 of its potential returns per unit of risk. CoStar Group is currently generating about 0.08 per unit of risk. If you would invest 396.00 in GP Investments on September 15, 2024 and sell it today you would earn a total of 18.00 from holding GP Investments or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GP Investments vs. CoStar Group
Performance |
| Timeline |
| GP Investments |
| CoStar Group |
GP Investments and CoStar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GP Investments and CoStar
The main advantage of trading using opposite GP Investments and CoStar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GP Investments position performs unexpectedly, CoStar 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 CoStar will offset losses from the drop in CoStar's long position.| GP Investments vs. MAHLE Metal Leve | GP Investments vs. New Oriental Education | GP Investments vs. Zoom Video Communications | GP Investments vs. Paycom Software |
| CoStar vs. Nordon Indstrias Metalrgicas | CoStar vs. Apartment Investment and | CoStar vs. Hospital Mater Dei | CoStar 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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