Correlation Between Oak View and Gannett

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

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

Diversification Opportunities for Oak View and Gannett

-0.49

Correlation Coefficient

Oak View  Gannett

Very good diversification

The 3 months correlation between Oak and Gannett is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Oak View National and Gannett Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gannett and Oak View 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 Oak View National are associated (or correlated) with Gannett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gannett has no effect on the direction of Oak View i.e., Oak View and Gannett go up and down completely randomly.

Pair Corralation between Oak View and Gannett

Given the investment horizon of 90 days Oak View National is expected to generate 0.39 times more return on investment than Gannett. However, Oak View National is 2.58 times less risky than Gannett. It trades about 0.18 of its potential returns per unit of risk. Gannett Co is currently generating about -0.05 per unit of risk. If you would invest  1,375  in Oak View National on October 25, 2024 and sell it today you would earn a total of  225.00  from holding Oak View National or generate 16.36% return on investment over 90 days.

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

Oak View National  vs.  Gannett Co

Oak View National

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oak View National are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile forward-looking signals, Oak View showed solid returns over the last few months and may actually be approaching a breakup point.

Gannett

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gannett Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Oak View and Gannett

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

The idea behind Oak View National and Gannett Co 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .