Correlation Between Gogoro and Gulf Island

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

By analyzing existing cross correlation between Gogoro Inc and Gulf Island Fabrication, you can compare the effects of market volatilities on Gogoro and Gulf Island 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 Gogoro with a short position of Gulf Island. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gogoro and Gulf Island.

Diversification Opportunities for Gogoro and Gulf Island

-0.33

Correlation Coefficient

Gogoro  Gulf Island

Very good diversification

The 3 months correlation between Gogoro and Gulf is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Gogoro Inc and Gulf Island Fabrication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulf Island Fabrication and Gogoro 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 Gogoro Inc are associated (or correlated) with Gulf Island. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulf Island Fabrication has no effect on the direction of Gogoro i.e., Gogoro and Gulf Island go up and down completely randomly.

Pair Corralation between Gogoro and Gulf Island

Considering the 90-day investment horizon Gogoro Inc is expected to under-perform the Gulf Island. In addition to that, Gogoro is 2.05 times more volatile than Gulf Island Fabrication. It trades about -0.09 of its total potential returns per unit of risk. Gulf Island Fabrication is currently generating about 0.11 per unit of volatility. If you would invest  572.00  in Gulf Island Fabrication on September 4, 2024 and sell it today you would earn a total of  126.00  from holding Gulf Island Fabrication or generate 22.03% return on investment over 90 days.

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

Gogoro Inc  vs.  Gulf Island Fabrication

Gogoro Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gogoro Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Gulf Island Fabrication

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gulf Island Fabrication are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical and fundamental indicators, Gulf Island demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gogoro and Gulf Island

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

The idea behind Gogoro Inc and Gulf Island Fabrication 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.