Correlation Between GoPro and Power Assets
Can any of the company-specific risk be diversified away by investing in both GoPro and Power Assets 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 Power Assets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoPro Inc and Power Assets Holdings, you can compare the effects of market volatilities on GoPro and Power Assets 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 Power Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoPro and Power Assets.
Diversification Opportunities for GoPro and Power Assets
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between GoPro and Power is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding GoPro Inc and Power Assets Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Assets Holdings 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 Power Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Assets Holdings has no effect on the direction of GoPro i.e., GoPro and Power Assets go up and down completely randomly.
Pair Corralation between GoPro and Power Assets
Given the investment horizon of 90 days GoPro Inc is expected to under-perform the Power Assets. In addition to that, GoPro is 1.48 times more volatile than Power Assets Holdings. It trades about -0.41 of its total potential returns per unit of risk. Power Assets Holdings is currently generating about -0.12 per unit of volatility. If you would invest 580.00 in Power Assets Holdings on January 26, 2024 and sell it today you would lose (25.00) from holding Power Assets Holdings or give up 4.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoPro Inc vs. Power Assets Holdings
Performance |
| Timeline |
| GoPro Inc |
| Power Assets Holdings |
GoPro and Power Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoPro and Power Assets
The main advantage of trading using opposite GoPro and Power Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoPro position performs unexpectedly, Power Assets 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 Power Assets will offset losses from the drop in Power Assets' long position.| GoPro vs. LG Display Co | GoPro vs. Vizio Holding Corp | GoPro vs. Universal Electronics | GoPro vs. Sonos Inc |
| Power Assets vs. Datang International Power | Power Assets vs. Maxim Power Corp | Power Assets vs. Pampa Energia SA | Power Assets vs. NRG Energy |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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