Correlation Between SVB Financial and GP Investments

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

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

Diversification Opportunities for SVB Financial and GP Investments

0.0

Correlation Coefficient

SVB Financial  GP Investments

Pay attention - limited upside

The 3 months correlation between SVB and GPIV33 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SVB Financial Group and GP Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GP Investments and SVB Financial 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 SVB Financial Group are associated (or correlated) with GP Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GP Investments has no effect on the direction of SVB Financial i.e., SVB Financial and GP Investments go up and down completely randomly.

Pair Corralation between SVB Financial and GP Investments

If you would invest  410.00  in GP Investments on September 21, 2024 and sell it today you would lose (5.00) from holding GP Investments or give up 1.22% of portfolio value over 90 days.

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

SVB Financial Group  vs.  GP Investments

SVB Financial Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SVB Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, SVB Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

GP Investments

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GP Investments are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, GP Investments is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SVB Financial and GP Investments

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

The idea behind SVB Financial Group and GP Investments 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.