Correlation Between Friendable and Gannett

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

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

Diversification Opportunities for Friendable and Gannett

0.21

Correlation Coefficient

Friendable  Gannett

Modest diversification

The 3 months correlation between Friendable and Gannett is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Friendable and Gannett Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gannett and Friendable 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 Friendable are associated (or correlated) with Gannett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gannett has no effect on the direction of Friendable i.e., Friendable and Gannett go up and down completely randomly.

Pair Corralation between Friendable and Gannett

Given the investment horizon of 90 days Friendable is expected to generate 3.44 times more return on investment than Gannett. However, Friendable is 3.44 times more volatile than Gannett Co. It trades about 0.03 of its potential returns per unit of risk. Gannett Co is currently generating about 0.06 per unit of risk. If you would invest  1.30  in Friendable on October 21, 2024 and sell it today you would lose (1.29) from holding Friendable or give up 99.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

Friendable  vs.  Gannett Co

Friendable

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Friendable 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 drivers remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Gannett

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gannett Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Gannett is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Friendable and Gannett

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

The idea behind Friendable and Gannett Co 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.