Correlation Between G Capital and Sherwood Public

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

By analyzing existing cross correlation between G Capital Public and Sherwood Public, you can compare the effects of market volatilities on G Capital and Sherwood Public 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 G Capital with a short position of Sherwood Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Capital and Sherwood Public.

Diversification Opportunities for G Capital and Sherwood Public

0.51

Correlation Coefficient

G Capital  Sherwood Public

Very weak diversification

The 3 months correlation between GCAP and Sherwood is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding G Capital Public and Sherwood Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherwood Public and G Capital 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 G Capital Public are associated (or correlated) with Sherwood Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sherwood Public has no effect on the direction of G Capital i.e., G Capital and Sherwood Public go up and down completely randomly.

Pair Corralation between G Capital and Sherwood Public

Assuming the 90 days trading horizon G Capital Public is expected to under-perform the Sherwood Public. In addition to that, G Capital is 1.31 times more volatile than Sherwood Public. It trades about -0.11 of its total potential returns per unit of risk. Sherwood Public is currently generating about -0.02 per unit of volatility. If you would invest  288.00  in Sherwood Public on December 22, 2024 and sell it today you would lose (18.00) from holding Sherwood Public or give up 6.25% of portfolio value over 90 days.

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

G Capital Public  vs.  Sherwood Public

G Capital Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days G Capital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Sherwood Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sherwood Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Sherwood Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with G Capital and Sherwood Public

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

The idea behind G Capital Public and Sherwood Public 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 Commodity Directory module to find actively traded commodities issued by global exchanges.