Correlation Between 23585WAA2 and Gap,

Can any of the company-specific risk be diversified away by investing in both 23585WAA2 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 23585WAA2 and Gap, into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US23585WAA27 and The Gap,, you can compare the effects of market volatilities on 23585WAA2 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 23585WAA2 with a short position of Gap,. Check out your portfolio center. Please also check ongoing floating volatility patterns of 23585WAA2 and Gap,.

Diversification Opportunities for 23585WAA2 and Gap,

-0.2

Correlation Coefficient

23585WAA2  Gap,

Good diversification

The 3 months correlation between 23585WAA2 and Gap, is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding US23585WAA27 and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, and 23585WAA2 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 US23585WAA27 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 23585WAA2 i.e., 23585WAA2 and Gap, go up and down completely randomly.

Pair Corralation between 23585WAA2 and Gap,

Assuming the 90 days trading horizon 23585WAA2 is expected to generate 5.94 times less return on investment than Gap,. But when comparing it to its historical volatility, US23585WAA27 is 7.36 times less risky than Gap,. It trades about 0.12 of its potential returns per unit of risk. The Gap, is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,147  in The Gap, on October 25, 2024 and sell it today you would earn a total of  317.00  from holding The Gap, or generate 14.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	51.67%
Values	Daily Returns

US23585WAA27  vs.  The Gap,

US23585WAA27

Risk-Adjusted Performance

9 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in US23585WAA27 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 23585WAA2 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gap,

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Gap, reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 23585WAA2 and Gap,

The main advantage of trading using opposite 23585WAA2 and Gap, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 23585WAA2 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 US23585WAA27 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.