Correlation Between Par Pacific and Gap,

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

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

Diversification Opportunities for Par Pacific and Gap,

-0.34

Correlation Coefficient

Par Pacific  Gap,

Very good diversification

The 3 months correlation between Par and Gap, is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Par Pacific Holdings and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, and Par Pacific 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 Par Pacific Holdings 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 Par Pacific i.e., Par Pacific and Gap, go up and down completely randomly.

Pair Corralation between Par Pacific and Gap,

Given the investment horizon of 90 days Par Pacific Holdings is expected to under-perform the Gap,. But the stock apears to be less risky and, when comparing its historical volatility, Par Pacific Holdings is 1.46 times less risky than Gap,. The stock trades about -0.05 of its potential returns per unit of risk. The The Gap, is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  870.00  in The Gap, on September 30, 2024 and sell it today you would earn a total of  1,558  from holding The Gap, or generate 179.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Par Pacific Holdings  vs.  The Gap,

Par Pacific Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Gap,

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Gap, may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Par Pacific and Gap,

The main advantage of trading using opposite Par Pacific and Gap, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Par Pacific 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 Par Pacific Holdings 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.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.