Correlation Between PGT Innovations and Gibraltar Industries

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

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

Diversification Opportunities for PGT Innovations and Gibraltar Industries

0.04

Correlation Coefficient

PGT Innovations  Gibraltar Industries

Significant diversification

The 3 months correlation between PGT and Gibraltar is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding PGT Innovations and Gibraltar Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gibraltar Industries and PGT Innovations 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 PGT Innovations are associated (or correlated) with Gibraltar Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gibraltar Industries has no effect on the direction of PGT Innovations i.e., PGT Innovations and Gibraltar Industries go up and down completely randomly.

Pair Corralation between PGT Innovations and Gibraltar Industries

If you would invest  6,681  in Gibraltar Industries on September 2, 2024 and sell it today you would earn a total of  563.00  from holding Gibraltar Industries or generate 8.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

PGT Innovations  vs.  Gibraltar Industries

PGT Innovations

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PGT Innovations has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, PGT Innovations is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Gibraltar Industries

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gibraltar Industries are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Gibraltar Industries may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with PGT Innovations and Gibraltar Industries

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

The idea behind PGT Innovations and Gibraltar Industries 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.