Correlation Between Gannett and Rio Silver

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

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

Diversification Opportunities for Gannett and Rio Silver

0.3

Correlation Coefficient

Gannett  Rio Silver

Weak diversification

The 3 months correlation between Gannett and Rio is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Gannett Co and Rio Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rio Silver and Gannett 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 Gannett Co are associated (or correlated) with Rio Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rio Silver has no effect on the direction of Gannett i.e., Gannett and Rio Silver go up and down completely randomly.

Pair Corralation between Gannett and Rio Silver

Considering the 90-day investment horizon Gannett Co is expected to under-perform the Rio Silver. But the stock apears to be less risky and, when comparing its historical volatility, Gannett Co is 10.73 times less risky than Rio Silver. The stock trades about -0.12 of its potential returns per unit of risk. The Rio Silver is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2.50  in Rio Silver on October 27, 2024 and sell it today you would lose (1.50) from holding Rio Silver or give up 60.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.48%
Values	Daily Returns

Gannett Co  vs.  Rio Silver

Gannett

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gannett Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Rio Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rio Silver has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly abnormal basic indicators, Rio Silver may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Gannett and Rio Silver

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

The idea behind Gannett Co and Rio Silver 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.