Correlation Between 03027XBZ2 and Gannett

Can any of the company-specific risk be diversified away by investing in both 03027XBZ2 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 03027XBZ2 and Gannett into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AMT 565 15 MAR 33 and Gannett Co, you can compare the effects of market volatilities on 03027XBZ2 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 03027XBZ2 with a short position of Gannett. Check out your portfolio center. Please also check ongoing floating volatility patterns of 03027XBZ2 and Gannett.

Diversification Opportunities for 03027XBZ2 and Gannett

0.22

Correlation Coefficient

03027XBZ2  Gannett

Modest diversification

The 3 months correlation between 03027XBZ2 and Gannett is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding AMT 565 15 MAR 33 and Gannett Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gannett and 03027XBZ2 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 AMT 565 15 MAR 33 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 03027XBZ2 i.e., 03027XBZ2 and Gannett go up and down completely randomly.

Pair Corralation between 03027XBZ2 and Gannett

Assuming the 90 days trading horizon AMT 565 15 MAR 33 is expected to generate 0.29 times more return on investment than Gannett. However, AMT 565 15 MAR 33 is 3.49 times less risky than Gannett. It trades about -0.04 of its potential returns per unit of risk. Gannett Co is currently generating about -0.09 per unit of risk. If you would invest  10,291  in AMT 565 15 MAR 33 on October 26, 2024 and sell it today you would lose (152.00) from holding AMT 565 15 MAR 33 or give up 1.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.12%
Values	Daily Returns

AMT 565 15 MAR 33  vs.  Gannett Co

AMT 565 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMT 565 15 MAR 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 03027XBZ2 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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 unfluctuating performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with 03027XBZ2 and Gannett

The main advantage of trading using opposite 03027XBZ2 and Gannett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 03027XBZ2 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 AMT 565 15 MAR 33 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..