Correlation Between Gibraltar Industries and PGT Innovations

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

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

Diversification Opportunities for Gibraltar Industries and PGT Innovations

0.0

Correlation Coefficient

Gibraltar Industries  PGT Innovations

Pay attention - limited upside

The 3 months correlation between Gibraltar and PGT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gibraltar Industries and PGT Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGT Innovations 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 PGT Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGT Innovations has no effect on the direction of Gibraltar Industries i.e., Gibraltar Industries and PGT Innovations go up and down completely randomly.

Pair Corralation between Gibraltar Industries and PGT Innovations

If you would invest  5,867  in Gibraltar Industries on December 28, 2024 and sell it today you would earn a total of  82.00  from holding Gibraltar Industries or generate 1.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Gibraltar Industries  vs.  PGT Innovations

Gibraltar Industries

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gibraltar Industries are ranked lower than 1 (%) 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.

PGT Innovations

Risk-Adjusted Performance

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.

Pair Trading with Gibraltar Industries and PGT Innovations

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

The idea behind Gibraltar Industries and PGT Innovations 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.