Correlation Between Nextracker and Gap,

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

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

Diversification Opportunities for Nextracker and Gap,

0.18

Correlation Coefficient

Nextracker  Gap,

Average diversification

The 3 months correlation between Nextracker and Gap, is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Nextracker Class A and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, and Nextracker 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 Nextracker Class A 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 Nextracker i.e., Nextracker and Gap, go up and down completely randomly.

Pair Corralation between Nextracker and Gap,

Considering the 90-day investment horizon Nextracker Class A is expected to generate 1.61 times more return on investment than Gap,. However, Nextracker is 1.61 times more volatile than The Gap,. It trades about 0.18 of its potential returns per unit of risk. The Gap, is currently generating about -0.14 per unit of risk. If you would invest  3,858  in Nextracker Class A on October 9, 2024 and sell it today you would earn a total of  381.00  from holding Nextracker Class A or generate 9.88% return on investment over 90 days.

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

Nextracker Class A  vs.  The Gap,

Nextracker Class A

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nextracker Class A are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Nextracker unveiled solid returns over the last few months and may actually be approaching a breakup point.

Gap,

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Gap, reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nextracker and Gap,

The main advantage of trading using opposite Nextracker and Gap, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextracker 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 Nextracker Class A 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.