Correlation Between Gap, and Nebius Group

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

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

Diversification Opportunities for Gap, and Nebius Group

0.69

Correlation Coefficient

Gap,  Nebius Group

Poor diversification

The 3 months correlation between Gap, and Nebius is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, and Nebius Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nebius Group NV 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 Nebius Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nebius Group NV has no effect on the direction of Gap, i.e., Gap, and Nebius Group go up and down completely randomly.

Pair Corralation between Gap, and Nebius Group

Considering the 90-day investment horizon Gap, is expected to generate 24.87 times less return on investment than Nebius Group. But when comparing it to its historical volatility, The Gap, is 1.77 times less risky than Nebius Group. It trades about 0.04 of its potential returns per unit of risk. Nebius Group NV is currently generating about 0.53 of returns per unit of risk over similar time horizon. If you would invest  2,806  in Nebius Group NV on October 26, 2024 and sell it today you would earn a total of  1,363  from holding Nebius Group NV or generate 48.57% return on investment over 90 days.

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

The Gap,  vs.  Nebius Group NV

Gap,

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Gap, reported solid returns over the last few months and may actually be approaching a breakup point.

Nebius Group NV

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nebius Group NV are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Nebius Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gap, and Nebius Group

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

The idea behind The Gap, and Nebius Group NV 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.