Correlation Between GP Investments and Discover Financial
Can any of the company-specific risk be diversified away by investing in both GP Investments and Discover Financial 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 Discover Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GP Investments and Discover Financial Services, you can compare the effects of market volatilities on GP Investments and Discover Financial 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 Discover Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of GP Investments and Discover Financial.
Diversification Opportunities for GP Investments and Discover Financial
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GPIV33 and Discover is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding GP Investments and Discover Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Discover Financial 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 Discover Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Discover Financial has no effect on the direction of GP Investments i.e., GP Investments and Discover Financial go up and down completely randomly.
Pair Corralation between GP Investments and Discover Financial
If you would invest 381.00 in GP Investments on October 11, 2024 and sell it today you would earn a total of 13.00 from holding GP Investments or generate 3.41% 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. Discover Financial Services
Performance |
| Timeline |
| GP Investments |
| Discover Financial |
GP Investments and Discover Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GP Investments and Discover Financial
The main advantage of trading using opposite GP Investments and Discover Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GP Investments position performs unexpectedly, Discover Financial 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 Discover Financial will offset losses from the drop in Discover Financial's long position.| GP Investments vs. Healthpeak Properties | GP Investments vs. United Rentals | GP Investments vs. Paycom Software | GP Investments vs. Clover Health Investments, |
| Discover Financial vs. Visa Inc | Discover Financial vs. Mastercard Incorporated | Discover Financial vs. American Express | Discover Financial vs. PayPal 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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