Correlation Between Global Partner and Gap,

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

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

Diversification Opportunities for Global Partner and Gap,

-0.6

Correlation Coefficient

Global Partner  Gap,

Excellent diversification

The 3 months correlation between Global and Gap, is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Global Partner Acq and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, and Global Partner 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 Global Partner Acq 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 Global Partner i.e., Global Partner and Gap, go up and down completely randomly.

Pair Corralation between Global Partner and Gap,

If you would invest  2,013  in The Gap, on September 21, 2024 and sell it today you would earn a total of  369.00  from holding The Gap, or generate 18.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Global Partner Acq  vs.  The Gap,

Global Partner Acq

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Partner Acq has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Global Partner is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private 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 inconsistent basic indicators, Gap, reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Partner and Gap,

The main advantage of trading using opposite Global Partner and Gap, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Partner 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 Global Partner Acq 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.