Correlation Between Old Republic and Gannett

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

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

Diversification Opportunities for Old Republic and Gannett

-0.22

Correlation Coefficient

Old Republic  Gannett

Very good diversification

The 3 months correlation between Old and Gannett is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Old Republic International and Gannett Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gannett and Old Republic 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 Old Republic International 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 Old Republic i.e., Old Republic and Gannett go up and down completely randomly.

Pair Corralation between Old Republic and Gannett

Considering the 90-day investment horizon Old Republic International is expected to generate 0.41 times more return on investment than Gannett. However, Old Republic International is 2.42 times less risky than Gannett. It trades about -0.1 of its potential returns per unit of risk. Gannett Co is currently generating about -0.06 per unit of risk. If you would invest  3,507  in Old Republic International on October 9, 2024 and sell it today you would lose (103.00) from holding Old Republic International or give up 2.94% of portfolio value over 90 days.

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

Old Republic International  vs.  Gannett Co

Old Republic Interna

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Old Republic International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Old Republic is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

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 fairly strong fundamental indicators, Gannett is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Old Republic and Gannett

The main advantage of trading using opposite Old Republic and Gannett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Republic 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 Old Republic International 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.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.