Correlation Between Montana Technologies and Gibraltar Industries

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

By analyzing existing cross correlation between Montana Technologies and Gibraltar Industries, you can compare the effects of market volatilities on Montana Technologies and Gibraltar Industries 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 Montana Technologies with a short position of Gibraltar Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Montana Technologies and Gibraltar Industries.

Diversification Opportunities for Montana Technologies and Gibraltar Industries

-0.23

Correlation Coefficient

Montana Technologies  Gibraltar Industries

Very good diversification

The 3 months correlation between Montana and Gibraltar is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Montana Technologies and Gibraltar Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gibraltar Industries and Montana Technologies 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 Montana Technologies are associated (or correlated) with Gibraltar Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gibraltar Industries has no effect on the direction of Montana Technologies i.e., Montana Technologies and Gibraltar Industries go up and down completely randomly.

Pair Corralation between Montana Technologies and Gibraltar Industries

Given the investment horizon of 90 days Montana Technologies is expected to under-perform the Gibraltar Industries. In addition to that, Montana Technologies is 3.48 times more volatile than Gibraltar Industries. It trades about -0.04 of its total potential returns per unit of risk. Gibraltar Industries is currently generating about 0.04 per unit of volatility. If you would invest  4,599  in Gibraltar Industries on September 21, 2024 and sell it today you would earn a total of  1,485  from holding Gibraltar Industries or generate 32.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	40.12%
Values	Daily Returns

Montana Technologies  vs.  Gibraltar Industries

Montana Technologies

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Montana Technologies are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Montana Technologies revealed solid returns over the last few months and may actually be approaching a breakup point.

Gibraltar Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gibraltar Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Montana Technologies and Gibraltar Industries

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

The idea behind Montana Technologies and Gibraltar Industries 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.