Correlation Between Gulf Island and Rose Hill

Can any of the company-specific risk be diversified away by investing in both Gulf Island and Rose Hill 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 Rose Hill 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 Rose Hill Acquisition, you can compare the effects of market volatilities on Gulf Island and Rose Hill 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 Rose Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Island and Rose Hill.

Diversification Opportunities for Gulf Island and Rose Hill

0.0

Correlation Coefficient

Gulf Island  Rose Hill

Pay attention - limited upside

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

Pair Corralation between Gulf Island and Rose Hill

If you would invest (100.00) in Rose Hill Acquisition on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Rose Hill Acquisition or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Gulf Island Fabrication  vs.  Rose Hill Acquisition

Gulf Island Fabrication

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gulf Island Fabrication has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Rose Hill Acquisition

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rose Hill Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Rose Hill is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Gulf Island and Rose Hill

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

The idea behind Gulf Island Fabrication and Rose Hill Acquisition 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..