Correlation Between Gap, and 23291KAH8

Can any of the company-specific risk be diversified away by investing in both Gap, and 23291KAH8 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 23291KAH8 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Gap, and DH EUROPE FINANCE, you can compare the effects of market volatilities on Gap, and 23291KAH8 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 23291KAH8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gap, and 23291KAH8.

Diversification Opportunities for Gap, and 23291KAH8

-0.02

Correlation Coefficient

Gap,  23291KAH8

Good diversification

The 3 months correlation between Gap, and 23291KAH8 is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, and DH EUROPE FINANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DH EUROPE FINANCE 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 23291KAH8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DH EUROPE FINANCE has no effect on the direction of Gap, i.e., Gap, and 23291KAH8 go up and down completely randomly.

Pair Corralation between Gap, and 23291KAH8

Considering the 90-day investment horizon The Gap, is expected to generate 8.01 times more return on investment than 23291KAH8. However, Gap, is 8.01 times more volatile than DH EUROPE FINANCE. It trades about 0.07 of its potential returns per unit of risk. DH EUROPE FINANCE is currently generating about -0.14 per unit of risk. If you would invest  2,134  in The Gap, on October 23, 2024 and sell it today you would earn a total of  212.00  from holding The Gap, or generate 9.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

The Gap,  vs.  DH EUROPE FINANCE

Gap,

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Gap, may actually be approaching a critical reversion point that can send shares even higher in February 2025.

DH EUROPE FINANCE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DH EUROPE FINANCE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 23291KAH8 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gap, and 23291KAH8

The main advantage of trading using opposite Gap, and 23291KAH8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gap, position performs unexpectedly, 23291KAH8 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 23291KAH8 will offset losses from the drop in 23291KAH8's long position.

The idea behind The Gap, and DH EUROPE FINANCE 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.