Correlation Between Gibraltar Industries and Montana Technologies
Can any of the company-specific risk be diversified away by investing in both Gibraltar Industries and Montana Technologies 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 Gibraltar Industries and Montana Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gibraltar Industries and Montana Technologies, you can compare the effects of market volatilities on Gibraltar Industries and Montana Technologies 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 Gibraltar Industries with a short position of Montana Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gibraltar Industries and Montana Technologies.
Diversification Opportunities for Gibraltar Industries and Montana Technologies
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gibraltar and Montana is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Gibraltar Industries and Montana Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montana Technologies and Gibraltar Industries 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 Gibraltar Industries are associated (or correlated) with Montana Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montana Technologies has no effect on the direction of Gibraltar Industries i.e., Gibraltar Industries and Montana Technologies go up and down completely randomly.
Pair Corralation between Gibraltar Industries and Montana Technologies
Given the investment horizon of 90 days Gibraltar Industries is expected to generate 0.29 times more return on investment than Montana Technologies. However, Gibraltar Industries is 3.45 times less risky than Montana Technologies. It trades about 0.01 of its potential returns per unit of risk. Montana Technologies is currently generating about -0.06 per unit of risk. If you would invest 6,959 in Gibraltar Industries on August 27, 2024 and sell it today you would earn a total of 144.00 from holding Gibraltar Industries or generate 2.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 72.98% |
| Values | Daily Returns |
Gibraltar Industries vs. Montana Technologies
Performance |
| Timeline |
| Gibraltar Industries |
| Montana Technologies |
Gibraltar Industries and Montana Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gibraltar Industries and Montana Technologies
The main advantage of trading using opposite Gibraltar Industries and Montana Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gibraltar Industries position performs unexpectedly, Montana Technologies 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 Montana Technologies will offset losses from the drop in Montana Technologies' long position.| Gibraltar Industries vs. Quanex Building Products | Gibraltar Industries vs. Jeld Wen Holding | Gibraltar Industries vs. Perma Pipe International Holdings | Gibraltar Industries vs. Interface |
| Montana Technologies vs. Gibraltar Industries | Montana Technologies vs. Quanex Building Products | Montana Technologies vs. Jeld Wen Holding | Montana Technologies vs. Interface |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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