Correlation Between GPT and TYSON FOODS

Can any of the company-specific risk be diversified away by investing in both GPT and TYSON FOODS 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 GPT and TYSON FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GPT Group and TYSON FOODS A , you can compare the effects of market volatilities on GPT and TYSON FOODS 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 GPT with a short position of TYSON FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GPT and TYSON FOODS.

Diversification Opportunities for GPT and TYSON FOODS

-0.46

Correlation Coefficient

GPT  TYSON FOODS

Very good diversification

The 3 months correlation between GPT and TYSON is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding GPT Group and TYSON FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TYSON FOODS A and GPT 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 GPT Group are associated (or correlated) with TYSON FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TYSON FOODS A has no effect on the direction of GPT i.e., GPT and TYSON FOODS go up and down completely randomly.

Pair Corralation between GPT and TYSON FOODS

Assuming the 90 days horizon GPT Group is expected to generate 1.89 times more return on investment than TYSON FOODS. However, GPT is 1.89 times more volatile than TYSON FOODS A . It trades about 0.04 of its potential returns per unit of risk. TYSON FOODS A is currently generating about 0.05 per unit of risk. If you would invest  232.00  in GPT Group on October 4, 2024 and sell it today you would earn a total of  27.00  from holding GPT Group or generate 11.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

GPT Group  vs.  TYSON FOODS A

GPT Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GPT Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

TYSON FOODS A

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TYSON FOODS A are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, TYSON FOODS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with GPT and TYSON FOODS

The main advantage of trading using opposite GPT and TYSON FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GPT position performs unexpectedly, TYSON FOODS 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 TYSON FOODS will offset losses from the drop in TYSON FOODS's long position.

The idea behind GPT Group and TYSON FOODS A 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.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.