Correlation Between Gulf Island and Powerbridge Technologies

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

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

Diversification Opportunities for Gulf Island and Powerbridge Technologies

-0.79

Correlation Coefficient

Gulf Island  Powerbridge Technologies

Pay attention - limited upside

The 3 months correlation between Gulf and Powerbridge is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Island Fabrication and Powerbridge Technologies Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powerbridge Technologies and Gulf Island 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 Gulf Island Fabrication are associated (or correlated) with Powerbridge Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powerbridge Technologies has no effect on the direction of Gulf Island i.e., Gulf Island and Powerbridge Technologies go up and down completely randomly.

Pair Corralation between Gulf Island and Powerbridge Technologies

Given the investment horizon of 90 days Gulf Island is expected to generate 47.19 times less return on investment than Powerbridge Technologies. But when comparing it to its historical volatility, Gulf Island Fabrication is 28.73 times less risky than Powerbridge Technologies. It trades about 0.04 of its potential returns per unit of risk. Powerbridge Technologies Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  330.00  in Powerbridge Technologies Co on September 25, 2024 and sell it today you would lose (300.00) from holding Powerbridge Technologies Co or give up 90.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	27.97%
Values	Daily Returns

Gulf Island Fabrication  vs.  Powerbridge Technologies Co

Gulf Island Fabrication

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gulf Island Fabrication are ranked lower than 10 (%) 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.

Powerbridge Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Powerbridge Technologies Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Powerbridge Technologies is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Gulf Island and Powerbridge Technologies

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

The idea behind Gulf Island Fabrication and Powerbridge Technologies Co 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.