Correlation Between GABY and PetMed Express

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

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

Diversification Opportunities for GABY and PetMed Express

0.0

Correlation Coefficient

GABY  PetMed Express

Pay attention - limited upside

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

Pair Corralation between GABY and PetMed Express

If you would invest  358.00  in PetMed Express on September 12, 2024 and sell it today you would earn a total of  300.00  from holding PetMed Express or generate 83.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

GABY Inc  vs.  PetMed Express

GABY Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

PetMed Express

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PetMed Express are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, PetMed Express unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GABY and PetMed Express

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

The idea behind GABY Inc and PetMed Express 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.