Correlation Between Gyrodyne Company and Newmark

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

Diversification Opportunities for Gyrodyne Company and Newmark

0.31

Correlation Coefficient

Gyrodyne Company  Newmark

Weak diversification

The 3 months correlation between Gyrodyne and Newmark is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Gyrodyne Company of and Newmark Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmark Group 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 Newmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmark Group has no effect on the direction of Gyrodyne Company i.e., Gyrodyne Company and Newmark go up and down completely randomly.

Pair Corralation between Gyrodyne Company and Newmark

Given the investment horizon of 90 days Gyrodyne Company of is expected to under-perform the Newmark. But the stock apears to be less risky and, when comparing its historical volatility, Gyrodyne Company of is 1.62 times less risky than Newmark. The stock trades about -0.16 of its potential returns per unit of risk. The Newmark Group is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1,276  in Newmark Group on December 30, 2024 and sell it today you would lose (65.00) from holding Newmark Group or give up 5.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	75.81%
Values	Daily Returns

Gyrodyne Company of  vs.  Newmark Group

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.

Newmark Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Newmark Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Newmark is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Gyrodyne Company and Newmark

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

The idea behind Gyrodyne Company of and Newmark 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.

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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.