Correlation Between Gyrodyne Company and New Concept

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

By analyzing existing cross correlation between Gyrodyne Company of and New Concept Energy, you can compare the effects of market volatilities on Gyrodyne Company and New Concept 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 Gyrodyne Company with a short position of New Concept. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gyrodyne Company and New Concept.

Diversification Opportunities for Gyrodyne Company and New Concept

0.77

Correlation Coefficient

Gyrodyne Company  New Concept

Poor diversification

The 3 months correlation between Gyrodyne and New is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Gyrodyne Company of and New Concept Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Concept Energy and Gyrodyne Company 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 Gyrodyne Company of are associated (or correlated) with New Concept. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Concept Energy has no effect on the direction of Gyrodyne Company i.e., Gyrodyne Company and New Concept go up and down completely randomly.

Pair Corralation between Gyrodyne Company and New Concept

Given the investment horizon of 90 days Gyrodyne Company of is expected to generate 0.44 times more return on investment than New Concept. However, Gyrodyne Company of is 2.26 times less risky than New Concept. It trades about -0.17 of its potential returns per unit of risk. New Concept Energy is currently generating about -0.13 per unit of risk. If you would invest  940.00  in Gyrodyne Company of on December 28, 2024 and sell it today you would lose (109.00) from holding Gyrodyne Company of or give up 11.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	76.67%
Values	Daily Returns

Gyrodyne Company of  vs.  New Concept Energy

Gyrodyne Company

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gyrodyne Company of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

New Concept Energy

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Gyrodyne Company and New Concept

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

The idea behind Gyrodyne Company of and New Concept Energy 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.