Correlation Between Five Point and GGE Old

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

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

Diversification Opportunities for Five Point and GGE Old

0.0

Correlation Coefficient

Five Point  GGE Old

Pay attention - limited upside

The 3 months correlation between Five and GGE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Five Point Holdings and GGE Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GGE Old and Five Point 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 Five Point Holdings are associated (or correlated) with GGE Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GGE Old has no effect on the direction of Five Point i.e., Five Point and GGE Old go up and down completely randomly.

Pair Corralation between Five Point and GGE Old

If you would invest  379.00  in Five Point Holdings on December 17, 2024 and sell it today you would earn a total of  176.00  from holding Five Point Holdings or generate 46.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Five Point Holdings  vs.  GGE Old

Five Point Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Five Point Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Five Point demonstrated solid returns over the last few months and may actually be approaching a breakup point.

GGE Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days GGE Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, GGE Old is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Five Point and GGE Old

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

The idea behind Five Point Holdings and GGE Old 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.