Correlation Between MYT Netherlands and Gap,

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

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

Diversification Opportunities for MYT Netherlands and Gap,

0.15

Correlation Coefficient

MYT Netherlands  Gap,

Average diversification

The 3 months correlation between MYT and Gap, is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding MYT Netherlands Parent and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, and MYT Netherlands 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 MYT Netherlands Parent 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 MYT Netherlands i.e., MYT Netherlands and Gap, go up and down completely randomly.

Pair Corralation between MYT Netherlands and Gap,

Given the investment horizon of 90 days MYT Netherlands Parent is expected to generate 1.65 times more return on investment than Gap,. However, MYT Netherlands is 1.65 times more volatile than The Gap,. It trades about 0.07 of its potential returns per unit of risk. The Gap, is currently generating about -0.16 per unit of risk. If you would invest  720.00  in MYT Netherlands Parent on October 11, 2024 and sell it today you would earn a total of  27.00  from holding MYT Netherlands Parent or generate 3.75% return on investment over 90 days.

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

MYT Netherlands Parent  vs.  The Gap,

MYT Netherlands Parent

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days MYT Netherlands Parent has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, MYT Netherlands is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Gap,

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 5 (%) 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 February 2025.

Pair Trading with MYT Netherlands and Gap,

The main advantage of trading using opposite MYT Netherlands and Gap, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYT Netherlands 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 MYT Netherlands Parent 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.