Correlation Between Intevac and Gorman Rupp

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

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

Diversification Opportunities for Intevac and Gorman Rupp

-0.74

Correlation Coefficient

Intevac  Gorman Rupp

Pay attention - limited upside

The 3 months correlation between Intevac and Gorman is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Intevac and Gorman Rupp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gorman Rupp and Intevac 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 Intevac are associated (or correlated) with Gorman Rupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gorman Rupp has no effect on the direction of Intevac i.e., Intevac and Gorman Rupp go up and down completely randomly.

Pair Corralation between Intevac and Gorman Rupp

Given the investment horizon of 90 days Intevac is expected to generate 1.44 times more return on investment than Gorman Rupp. However, Intevac is 1.44 times more volatile than Gorman Rupp. It trades about 0.09 of its potential returns per unit of risk. Gorman Rupp is currently generating about -0.05 per unit of risk. If you would invest  333.00  in Intevac on October 26, 2024 and sell it today you would earn a total of  11.00  from holding Intevac or generate 3.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Intevac  vs.  Gorman Rupp

Intevac

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intevac are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Intevac may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Gorman Rupp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gorman Rupp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Gorman Rupp is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Intevac and Gorman Rupp

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

The idea behind Intevac and Gorman Rupp 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.