Correlation Between Applovin Corp and Gulfport Energy

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

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

Diversification Opportunities for Applovin Corp and Gulfport Energy

0.58

Correlation Coefficient

Applovin Corp  Gulfport Energy

Very weak diversification

The 3 months correlation between Applovin and Gulfport is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Applovin Corp and Gulfport Energy Operating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulfport Energy Operating and Applovin 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 Applovin Corp are associated (or correlated) with Gulfport Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulfport Energy Operating has no effect on the direction of Applovin Corp i.e., Applovin Corp and Gulfport Energy go up and down completely randomly.

Pair Corralation between Applovin Corp and Gulfport Energy

Considering the 90-day investment horizon Applovin Corp is expected to generate 2.39 times more return on investment than Gulfport Energy. However, Applovin Corp is 2.39 times more volatile than Gulfport Energy Operating. It trades about 0.44 of its potential returns per unit of risk. Gulfport Energy Operating is currently generating about 0.03 per unit of risk. If you would invest  6,714  in Applovin Corp on August 3, 2024 and sell it today you would earn a total of  10,225  from holding Applovin Corp or generate 152.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Applovin Corp  vs.  Gulfport Energy Operating

Applovin Corp

Risk-Adjusted Performance

34 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Applovin Corp are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Applovin Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Gulfport Energy Operating

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gulfport Energy Operating are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Gulfport Energy is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Applovin Corp and Gulfport Energy

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

The idea behind Applovin Corp and Gulfport Energy Operating 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.