Correlation Between NCR Corp and Gartner

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

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

Diversification Opportunities for NCR Corp and Gartner

0.62

Correlation Coefficient

NCR Corp  Gartner

Poor diversification

The 3 months correlation between NCR and Gartner is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding NCR Corp and Gartner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gartner and NCR Corp 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 NCR Corp are associated (or correlated) with Gartner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gartner has no effect on the direction of NCR Corp i.e., NCR Corp and Gartner go up and down completely randomly.

Pair Corralation between NCR Corp and Gartner

If you would invest  48,183  in Gartner on September 2, 2024 and sell it today you would earn a total of  3,610  from holding Gartner or generate 7.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

NCR Corp  vs.  Gartner

NCR Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NCR Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, NCR Corp is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Gartner

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gartner are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Gartner may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with NCR Corp and Gartner

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

The idea behind NCR Corp and Gartner 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.

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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 Stocks Directory module to find actively traded stocks across global markets.