Correlation Between 23291KAH8 and Gap,

Can any of the company-specific risk be diversified away by investing in both 23291KAH8 and Gap, 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 23291KAH8 and Gap, into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DH EUROPE FINANCE and The Gap,, you can compare the effects of market volatilities on 23291KAH8 and Gap, 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 23291KAH8 with a short position of Gap,. Check out your portfolio center. Please also check ongoing floating volatility patterns of 23291KAH8 and Gap,.

Diversification Opportunities for 23291KAH8 and Gap,

-0.3

Correlation Coefficient

23291KAH8  Gap,

Very good diversification

The 3 months correlation between 23291KAH8 and Gap, is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding DH EUROPE FINANCE and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, and 23291KAH8 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 DH EUROPE FINANCE are associated (or correlated) with Gap,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gap, has no effect on the direction of 23291KAH8 i.e., 23291KAH8 and Gap, go up and down completely randomly.

Pair Corralation between 23291KAH8 and Gap,

Assuming the 90 days trading horizon DH EUROPE FINANCE is expected to under-perform the Gap,. But the bond apears to be less risky and, when comparing its historical volatility, DH EUROPE FINANCE is 7.67 times less risky than Gap,. The bond trades about -0.18 of its potential returns per unit of risk. The The Gap, is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,053  in The Gap, on October 8, 2024 and sell it today you would earn a total of  369.00  from holding The Gap, or generate 17.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

DH EUROPE FINANCE  vs.  The Gap,

DH EUROPE FINANCE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DH EUROPE FINANCE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 23291KAH8 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Gap,

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Gap, reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 23291KAH8 and Gap,

The main advantage of trading using opposite 23291KAH8 and Gap, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 23291KAH8 position performs unexpectedly, Gap, 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 Gap, will offset losses from the drop in Gap,'s long position.

The idea behind DH EUROPE FINANCE and The Gap, 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.