Correlation Between GoPro and US Global
Can any of the company-specific risk be diversified away by investing in both GoPro and US Global 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 GoPro and US Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoPro Inc and US Global Sea, you can compare the effects of market volatilities on GoPro and US Global 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 GoPro with a short position of US Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoPro and US Global.
Diversification Opportunities for GoPro and US Global
Poor diversification
The 3 months correlation between GoPro and SEA is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding GoPro Inc and US Global Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Global Sea and GoPro 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 GoPro Inc are associated (or correlated) with US Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Global Sea has no effect on the direction of GoPro i.e., GoPro and US Global go up and down completely randomly.
Pair Corralation between GoPro and US Global
Given the investment horizon of 90 days GoPro Inc is expected to under-perform the US Global. In addition to that, GoPro is 2.73 times more volatile than US Global Sea. It trades about -0.44 of its total potential returns per unit of risk. US Global Sea is currently generating about 0.17 per unit of volatility. If you would invest 1,490 in US Global Sea on January 24, 2024 and sell it today you would earn a total of 47.00 from holding US Global Sea or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoPro Inc vs. US Global Sea
Performance |
| Timeline |
| GoPro Inc |
| US Global Sea |
GoPro and US Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoPro and US Global
The main advantage of trading using opposite GoPro and US Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoPro position performs unexpectedly, US Global 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 US Global will offset losses from the drop in US Global's long position.| GoPro vs. Brunswick | GoPro vs. Ralph Lauren Corp | GoPro vs. Under Armour C | GoPro vs. Dogness International Corp |
| US Global vs. Materials Select Sector | US Global vs. Consumer Discretionary Select | US Global vs. Consumer Staples Select | US Global vs. Health Care Select |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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