Correlation Between Nasdaq and GCP Applied
Can any of the company-specific risk be diversified away by investing in both Nasdaq and GCP Applied 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 Nasdaq and GCP Applied into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and GCP Applied Technologies, you can compare the effects of market volatilities on Nasdaq and GCP Applied 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 Nasdaq with a short position of GCP Applied. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and GCP Applied.
Diversification Opportunities for Nasdaq and GCP Applied
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nasdaq and GCP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and GCP Applied Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCP Applied Technologies and Nasdaq 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 Nasdaq Inc are associated (or correlated) with GCP Applied. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GCP Applied Technologies has no effect on the direction of Nasdaq i.e., Nasdaq and GCP Applied go up and down completely randomly.
Pair Corralation between Nasdaq and GCP Applied
If you would invest 6,045 in Nasdaq Inc on October 13, 2024 and sell it today you would earn a total of 1,543 from holding Nasdaq Inc or generate 25.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Nasdaq Inc vs. GCP Applied Technologies
Performance |
| Timeline |
| Nasdaq Inc |
| GCP Applied Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nasdaq and GCP Applied Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and GCP Applied
The main advantage of trading using opposite Nasdaq and GCP Applied positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, GCP Applied 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 GCP Applied will offset losses from the drop in GCP Applied's long position.The idea behind Nasdaq Inc and GCP Applied Technologies 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.| GCP Applied vs. Bright Scholar Education | GCP Applied vs. Delek Logistics Partners | GCP Applied vs. Broadleaf Co | GCP Applied vs. Skillful Craftsman Education |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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