Correlation Between Gibraltar Industries and Caesarstone

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

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

Diversification Opportunities for Gibraltar Industries and Caesarstone

-0.08

Correlation Coefficient

Gibraltar Industries  Caesarstone

Good diversification

The 3 months correlation between Gibraltar and Caesarstone is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Gibraltar Industries and Caesarstone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caesarstone and Gibraltar Industries 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 Gibraltar Industries are associated (or correlated) with Caesarstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caesarstone has no effect on the direction of Gibraltar Industries i.e., Gibraltar Industries and Caesarstone go up and down completely randomly.

Pair Corralation between Gibraltar Industries and Caesarstone

Given the investment horizon of 90 days Gibraltar Industries is expected to generate 2.47 times less return on investment than Caesarstone. But when comparing it to its historical volatility, Gibraltar Industries is 1.84 times less risky than Caesarstone. It trades about 0.04 of its potential returns per unit of risk. Caesarstone is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  458.00  in Caesarstone on September 12, 2024 and sell it today you would earn a total of  34.00  from holding Caesarstone or generate 7.42% return on investment over 90 days.

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

Gibraltar Industries  vs.  Caesarstone

Gibraltar Industries

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gibraltar Industries are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Gibraltar Industries is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Caesarstone

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Caesarstone are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Caesarstone may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gibraltar Industries and Caesarstone

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

The idea behind Gibraltar Industries and Caesarstone 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 Stocks Directory module to find actively traded stocks across global markets.