Correlation Between Gap, and ReWalk Robotics
Can any of the company-specific risk be diversified away by investing in both Gap, and ReWalk Robotics 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 Gap, and ReWalk Robotics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gap, and ReWalk Robotics, you can compare the effects of market volatilities on Gap, and ReWalk Robotics 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 Gap, with a short position of ReWalk Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gap, and ReWalk Robotics.
Diversification Opportunities for Gap, and ReWalk Robotics
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gap, and ReWalk is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, and ReWalk Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReWalk Robotics and Gap, 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 The Gap, are associated (or correlated) with ReWalk Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReWalk Robotics has no effect on the direction of Gap, i.e., Gap, and ReWalk Robotics go up and down completely randomly.
Pair Corralation between Gap, and ReWalk Robotics
Considering the 90-day investment horizon The Gap, is expected to under-perform the ReWalk Robotics. But the stock apears to be less risky and, when comparing its historical volatility, The Gap, is 4.59 times less risky than ReWalk Robotics. The stock trades about -0.13 of its potential returns per unit of risk. The ReWalk Robotics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 189.00 in ReWalk Robotics on December 4, 2024 and sell it today you would lose (22.00) from holding ReWalk Robotics or give up 11.64% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
The Gap, vs. ReWalk Robotics
Performance |
Timeline |
Gap, |
ReWalk Robotics |
Gap, and ReWalk Robotics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gap, and ReWalk Robotics
The main advantage of trading using opposite Gap, and ReWalk Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gap, position performs unexpectedly, ReWalk Robotics 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 ReWalk Robotics will offset losses from the drop in ReWalk Robotics' long position.The idea behind The Gap, and ReWalk Robotics 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.ReWalk Robotics vs. United Natural Foods | ReWalk Robotics vs. Cars Inc | ReWalk Robotics vs. BorgWarner | ReWalk Robotics vs. FitLife Brands, Common |
Check out your portfolio center.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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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