Correlation Between Gap and Reitmans (Canada)
Can any of the company-specific risk be diversified away by investing in both Gap and Reitmans (Canada) 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 Reitmans (Canada) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gap Inc and Reitmans Limited, you can compare the effects of market volatilities on Gap and Reitmans (Canada) 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 Reitmans (Canada). Check out your portfolio center. Please also check ongoing floating volatility patterns of Gap and Reitmans (Canada).
Diversification Opportunities for Gap and Reitmans (Canada)
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gap and Reitmans is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Gap Inc and Reitmans Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reitmans (Canada) 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 Gap Inc are associated (or correlated) with Reitmans (Canada). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reitmans (Canada) has no effect on the direction of Gap i.e., Gap and Reitmans (Canada) go up and down completely randomly.
Pair Corralation between Gap and Reitmans (Canada)
If you would invest 197.00 in Reitmans Limited on August 31, 2024 and sell it today you would earn a total of 3.00 from holding Reitmans Limited or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Gap Inc vs. Reitmans Limited
Performance |
| Timeline |
| Gap Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Reitmans (Canada) |
Gap and Reitmans (Canada) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gap and Reitmans (Canada)
The main advantage of trading using opposite Gap and Reitmans (Canada) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gap position performs unexpectedly, Reitmans (Canada) 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 Reitmans (Canada) will offset losses from the drop in Reitmans (Canada)'s long position.The idea behind Gap Inc and Reitmans Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Reitmans (Canada) vs. Industria de Diseno | Reitmans (Canada) vs. Shoe Carnival | Reitmans (Canada) vs. Genesco | Reitmans (Canada) vs. Ross Stores |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |