Correlation Between Gap, and Contextlogic

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

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

Diversification Opportunities for Gap, and Contextlogic

-0.33

Correlation Coefficient

Gap,  Contextlogic

Very good diversification

The 3 months correlation between Gap, and Contextlogic is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, and Contextlogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contextlogic 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 Contextlogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contextlogic has no effect on the direction of Gap, i.e., Gap, and Contextlogic go up and down completely randomly.

Pair Corralation between Gap, and Contextlogic

Considering the 90-day investment horizon The Gap, is expected to under-perform the Contextlogic. But the stock apears to be less risky and, when comparing its historical volatility, The Gap, is 1.1 times less risky than Contextlogic. The stock trades about -0.06 of its potential returns per unit of risk. The Contextlogic is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  660.00  in Contextlogic on December 21, 2024 and sell it today you would earn a total of  95.00  from holding Contextlogic or generate 14.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

The Gap,  vs.  Contextlogic

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 abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Contextlogic

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Contextlogic are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Contextlogic exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gap, and Contextlogic

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

The idea behind The Gap, and Contextlogic 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.