Correlation Between Gap, and Chicago Atlantic

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

By analyzing existing cross correlation between The Gap, and Chicago Atlantic BDC,, you can compare the effects of market volatilities on Gap, and Chicago Atlantic 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 Chicago Atlantic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gap, and Chicago Atlantic.

Diversification Opportunities for Gap, and Chicago Atlantic

-0.06

Correlation Coefficient

Gap,  Chicago Atlantic

Good diversification

The 3 months correlation between Gap, and Chicago is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, and Chicago Atlantic BDC, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicago Atlantic BDC, 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 Chicago Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicago Atlantic BDC, has no effect on the direction of Gap, i.e., Gap, and Chicago Atlantic go up and down completely randomly.

Pair Corralation between Gap, and Chicago Atlantic

Considering the 90-day investment horizon The Gap, is expected to generate 3.38 times more return on investment than Chicago Atlantic. However, Gap, is 3.38 times more volatile than Chicago Atlantic BDC,. It trades about 0.01 of its potential returns per unit of risk. Chicago Atlantic BDC, is currently generating about -0.07 per unit of risk. If you would invest  2,260  in The Gap, on December 11, 2024 and sell it today you would lose (24.00) from holding The Gap, or give up 1.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

The Gap,  vs.  Chicago Atlantic BDC,

Gap,

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Gap, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Chicago Atlantic BDC,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chicago Atlantic BDC, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Chicago Atlantic is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Gap, and Chicago Atlantic

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

The idea behind The Gap, and Chicago Atlantic BDC, 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.