Correlation Between Gibraltar Industries and Interface
Can any of the company-specific risk be diversified away by investing in both Gibraltar Industries and Interface 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 Interface into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gibraltar Industries and Interface, you can compare the effects of market volatilities on Gibraltar Industries and Interface 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 Interface. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gibraltar Industries and Interface.
Diversification Opportunities for Gibraltar Industries and Interface
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gibraltar and Interface is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Gibraltar Industries and Interface in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interface 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 Interface. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interface has no effect on the direction of Gibraltar Industries i.e., Gibraltar Industries and Interface go up and down completely randomly.
Pair Corralation between Gibraltar Industries and Interface
Given the investment horizon of 90 days Gibraltar Industries is expected to generate 12.81 times less return on investment than Interface. But when comparing it to its historical volatility, Gibraltar Industries is 1.5 times less risky than Interface. It trades about 0.01 of its potential returns per unit of risk. Interface is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,059 in Interface on August 27, 2024 and sell it today you would earn a total of 1,487 from holding Interface or generate 140.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gibraltar Industries vs. Interface
Performance |
| Timeline |
| Gibraltar Industries |
| Interface |
Gibraltar Industries and Interface Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gibraltar Industries and Interface
The main advantage of trading using opposite Gibraltar Industries and Interface positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gibraltar Industries position performs unexpectedly, Interface 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 Interface will offset losses from the drop in Interface'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 |
| Interface vs. Quanex Building Products | Interface vs. Janus International Group | Interface vs. Apogee Enterprises | Interface 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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