Correlation Between Gibraltar Industries and Travis Perkins
Can any of the company-specific risk be diversified away by investing in both Gibraltar Industries and Travis Perkins 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 Travis Perkins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gibraltar Industries and Travis Perkins PLC, you can compare the effects of market volatilities on Gibraltar Industries and Travis Perkins 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 Travis Perkins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gibraltar Industries and Travis Perkins.
Diversification Opportunities for Gibraltar Industries and Travis Perkins
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gibraltar and Travis is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Gibraltar Industries and Travis Perkins PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Travis Perkins PLC 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 Travis Perkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Travis Perkins PLC has no effect on the direction of Gibraltar Industries i.e., Gibraltar Industries and Travis Perkins go up and down completely randomly.
Pair Corralation between Gibraltar Industries and Travis Perkins
Given the investment horizon of 90 days Gibraltar Industries is expected to generate 0.8 times more return on investment than Travis Perkins. However, Gibraltar Industries is 1.25 times less risky than Travis Perkins. It trades about 0.11 of its potential returns per unit of risk. Travis Perkins PLC is currently generating about 0.01 per unit of risk. If you would invest 5,908 in Gibraltar Industries on November 5, 2024 and sell it today you would earn a total of 229.00 from holding Gibraltar Industries or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.48% |
| Values | Daily Returns |
Gibraltar Industries vs. Travis Perkins PLC
Performance |
| Timeline |
| Gibraltar Industries |
| Travis Perkins PLC |
Gibraltar Industries and Travis Perkins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gibraltar Industries and Travis Perkins
The main advantage of trading using opposite Gibraltar Industries and Travis Perkins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gibraltar Industries position performs unexpectedly, Travis Perkins 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 Travis Perkins will offset losses from the drop in Travis Perkins' 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 |
| Travis Perkins vs. Atlas Engineered Products | Travis Perkins vs. Antelope Enterprise Holdings | Travis Perkins vs. Intelligent Living Application | Travis Perkins vs. Armstrong World 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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