Correlation Between AP Public and GFPT Public

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

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

Diversification Opportunities for AP Public and GFPT Public

-0.62

Correlation Coefficient

AP Public  GFPT Public

Excellent diversification

The 3 months correlation between AP Public and GFPT is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding AP Public and GFPT Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFPT Public and AP Public 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 AP Public are associated (or correlated) with GFPT Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFPT Public has no effect on the direction of AP Public i.e., AP Public and GFPT Public go up and down completely randomly.

Pair Corralation between AP Public and GFPT Public

Assuming the 90 days horizon AP Public is expected to generate 0.7 times more return on investment than GFPT Public. However, AP Public is 1.43 times less risky than GFPT Public. It trades about 0.06 of its potential returns per unit of risk. GFPT Public is currently generating about -0.02 per unit of risk. If you would invest  810.00  in AP Public on December 30, 2024 and sell it today you would earn a total of  50.00  from holding AP Public or generate 6.17% return on investment over 90 days.

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

AP Public  vs.  GFPT Public

AP Public

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AP Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, AP Public may actually be approaching a critical reversion point that can send shares even higher in April 2025.

GFPT Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days GFPT Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, GFPT Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with AP Public and GFPT Public

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

The idea behind AP Public and GFPT Public 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.