Correlation Between BELIMO Holding and Gibraltar Industries

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

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

Diversification Opportunities for BELIMO Holding and Gibraltar Industries

0.5

Correlation Coefficient

BELIMO Holding  Gibraltar Industries

Very weak diversification

The 3 months correlation between BELIMO and Gibraltar is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding BELIMO Holding AG and Gibraltar Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gibraltar Industries and BELIMO Holding 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 BELIMO Holding AG 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 BELIMO Holding i.e., BELIMO Holding and Gibraltar Industries go up and down completely randomly.

Pair Corralation between BELIMO Holding and Gibraltar Industries

Assuming the 90 days horizon BELIMO Holding AG is expected to generate 0.9 times more return on investment than Gibraltar Industries. However, BELIMO Holding AG is 1.11 times less risky than Gibraltar Industries. It trades about 0.09 of its potential returns per unit of risk. Gibraltar Industries is currently generating about -0.01 per unit of risk. If you would invest  47,500  in BELIMO Holding AG on October 1, 2024 and sell it today you would earn a total of  20,372  from holding BELIMO Holding AG or generate 42.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	76.47%
Values	Daily Returns

BELIMO Holding AG  vs.  Gibraltar Industries

BELIMO Holding AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BELIMO Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BELIMO Holding is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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 BELIMO Holding and Gibraltar Industries

The main advantage of trading using opposite BELIMO Holding and Gibraltar Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BELIMO Holding 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 BELIMO Holding AG 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .