Correlation Between Gates Industrial and QVC
Can any of the company-specific risk be diversified away by investing in both Gates Industrial and QVC 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 Gates Industrial and QVC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gates Industrial and QVC Group, you can compare the effects of market volatilities on Gates Industrial and QVC 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 Gates Industrial with a short position of QVC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gates Industrial and QVC.
Diversification Opportunities for Gates Industrial and QVC
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gates and QVC is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Gates Industrial and QVC Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QVC Group and Gates Industrial 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 Gates Industrial are associated (or correlated) with QVC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QVC Group has no effect on the direction of Gates Industrial i.e., Gates Industrial and QVC go up and down completely randomly.
Pair Corralation between Gates Industrial and QVC
Given the investment horizon of 90 days Gates Industrial is expected to generate 0.13 times more return on investment than QVC. However, Gates Industrial is 7.59 times less risky than QVC. It trades about 0.32 of its potential returns per unit of risk. QVC Group is currently generating about -0.04 per unit of risk. If you would invest 1,892 in Gates Industrial on April 30, 2025 and sell it today you would earn a total of 634.00 from holding Gates Industrial or generate 33.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Gates Industrial vs. QVC Group
Performance |
Timeline |
Gates Industrial |
QVC Group |
Gates Industrial and QVC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gates Industrial and QVC
The main advantage of trading using opposite Gates Industrial and QVC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gates Industrial position performs unexpectedly, QVC 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 QVC will offset losses from the drop in QVC's long position.Gates Industrial vs. Crane Company | Gates Industrial vs. Hillenbrand | Gates Industrial vs. Flowserve | Gates Industrial vs. Gorman Rupp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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