Correlation Between Gestamp Automocion and Fluidra

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

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

Diversification Opportunities for Gestamp Automocion and Fluidra

0.0

Correlation Coefficient

Gestamp Automocion  Fluidra

Pay attention - limited upside

The 3 months correlation between Gestamp and Fluidra is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gestamp Automocion SA and Fluidra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluidra and Gestamp Automocion 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 Gestamp Automocion SA are associated (or correlated) with Fluidra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluidra has no effect on the direction of Gestamp Automocion i.e., Gestamp Automocion and Fluidra go up and down completely randomly.

Pair Corralation between Gestamp Automocion and Fluidra

Assuming the 90 days trading horizon Gestamp Automocion SA is expected to under-perform the Fluidra. In addition to that, Gestamp Automocion is 1.18 times more volatile than Fluidra. It trades about -0.06 of its total potential returns per unit of risk. Fluidra is currently generating about 0.15 per unit of volatility. If you would invest  2,117  in Fluidra on September 5, 2024 and sell it today you would earn a total of  411.00  from holding Fluidra or generate 19.41% return on investment over 90 days.

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

Gestamp Automocion SA  vs.  Fluidra

Gestamp Automocion

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gestamp Automocion SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Fluidra

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fluidra are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Fluidra exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gestamp Automocion and Fluidra

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

The idea behind Gestamp Automocion SA and Fluidra 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.