Correlation Between GPS Old and Mr Price

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Can any of the company-specific risk be diversified away by investing in both GPS Old and Mr Price 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 GPS Old and Mr Price into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GPS Old and Mr Price Group, you can compare the effects of market volatilities on GPS Old and Mr Price 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 GPS Old with a short position of Mr Price. Check out your portfolio center. Please also check ongoing floating volatility patterns of GPS Old and Mr Price.

Diversification Opportunities for GPS Old and Mr Price

-0.61
  Correlation Coefficient

Excellent diversification

The 3 months correlation between GPS and MRPLY is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding GPS Old and Mr Price Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mr Price Group and GPS Old 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 GPS Old are associated (or correlated) with Mr Price. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mr Price Group has no effect on the direction of GPS Old i.e., GPS Old and Mr Price go up and down completely randomly.

Pair Corralation between GPS Old and Mr Price

If you would invest  2,328  in GPS Old on October 24, 2024 and sell it today you would earn a total of  0.00  from holding GPS Old or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy1.22%
ValuesDaily Returns

GPS Old  vs.  Mr Price Group

 Performance 
       Timeline  
GPS Old 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Mr Price Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, Mr Price is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

GPS Old and Mr Price Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GPS Old and Mr Price

The main advantage of trading using opposite GPS Old and Mr Price positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GPS Old position performs unexpectedly, Mr Price 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 Mr Price will offset losses from the drop in Mr Price's long position.
The idea behind GPS Old and Mr Price Group 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.
Check out your portfolio center.
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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