Correlation Between Mosaic and Gap,

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

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

Diversification Opportunities for Mosaic and Gap,

0.36

Correlation Coefficient

Mosaic  Gap,

Weak diversification

The 3 months correlation between Mosaic and Gap, is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding The Mosaic and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, and Mosaic 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 The Mosaic are associated (or correlated) with Gap,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gap, has no effect on the direction of Mosaic i.e., Mosaic and Gap, go up and down completely randomly.

Pair Corralation between Mosaic and Gap,

Considering the 90-day investment horizon The Mosaic is expected to under-perform the Gap,. But the stock apears to be less risky and, when comparing its historical volatility, The Mosaic is 1.24 times less risky than Gap,. The stock trades about -0.03 of its potential returns per unit of risk. The The Gap, is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,266  in The Gap, on August 31, 2024 and sell it today you would earn a total of  156.00  from holding The Gap, or generate 6.88% return on investment over 90 days.

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

The Mosaic  vs.  The Gap,

Mosaic

Risk-Adjusted Performance

0 of 100

Very Weak

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

Gap,

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Gap, may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Mosaic and Gap,

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

The idea behind The Mosaic and The Gap, 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.