Correlation Between Gibraltar Industries and Alpha Pro
Can any of the company-specific risk be diversified away by investing in both Gibraltar Industries and Alpha Pro 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 Alpha Pro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gibraltar Industries and Alpha Pro Tech, you can compare the effects of market volatilities on Gibraltar Industries and Alpha Pro 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 Alpha Pro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gibraltar Industries and Alpha Pro.
Diversification Opportunities for Gibraltar Industries and Alpha Pro
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gibraltar and Alpha is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Gibraltar Industries and Alpha Pro Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Pro Tech 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 Alpha Pro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Pro Tech has no effect on the direction of Gibraltar Industries i.e., Gibraltar Industries and Alpha Pro go up and down completely randomly.
Pair Corralation between Gibraltar Industries and Alpha Pro
Given the investment horizon of 90 days Gibraltar Industries is expected to under-perform the Alpha Pro. But the stock apears to be less risky and, when comparing its historical volatility, Gibraltar Industries is 1.34 times less risky than Alpha Pro. The stock trades about -0.05 of its potential returns per unit of risk. The Alpha Pro Tech is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 501.00 in Alpha Pro Tech on November 3, 2024 and sell it today you would earn a total of 34.00 from holding Alpha Pro Tech or generate 6.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gibraltar Industries vs. Alpha Pro Tech
Performance |
| Timeline |
| Gibraltar Industries |
| Alpha Pro Tech |
Gibraltar Industries and Alpha Pro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gibraltar Industries and Alpha Pro
The main advantage of trading using opposite Gibraltar Industries and Alpha Pro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gibraltar Industries position performs unexpectedly, Alpha Pro 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 Alpha Pro will offset losses from the drop in Alpha Pro's 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 |
| Alpha Pro vs. Trex Company | Alpha Pro vs. Quanex Building Products | Alpha Pro vs. Armstrong World Industries | Alpha Pro vs. Gibraltar Industries |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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