Correlation Between Twin Vee and Gildan Activewear

Can any of the company-specific risk be diversified away by investing in both Twin Vee and Gildan Activewear 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 Twin Vee and Gildan Activewear into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Twin Vee Powercats and Gildan Activewear, you can compare the effects of market volatilities on Twin Vee and Gildan Activewear 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 Twin Vee with a short position of Gildan Activewear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twin Vee and Gildan Activewear.

Diversification Opportunities for Twin Vee and Gildan Activewear

-0.4

Correlation Coefficient

Twin Vee  Gildan Activewear

Very good diversification

The 3 months correlation between Twin and Gildan is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Twin Vee Powercats and Gildan Activewear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gildan Activewear and Twin Vee 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 Twin Vee Powercats are associated (or correlated) with Gildan Activewear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gildan Activewear has no effect on the direction of Twin Vee i.e., Twin Vee and Gildan Activewear go up and down completely randomly.

Pair Corralation between Twin Vee and Gildan Activewear

Given the investment horizon of 90 days Twin Vee Powercats is expected to under-perform the Gildan Activewear. In addition to that, Twin Vee is 2.87 times more volatile than Gildan Activewear. It trades about -0.02 of its total potential returns per unit of risk. Gildan Activewear is currently generating about 0.02 per unit of volatility. If you would invest  2,978  in Gildan Activewear on February 3, 2024 and sell it today you would earn a total of  375.00  from holding Gildan Activewear or generate 12.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Twin Vee Powercats  vs.  Gildan Activewear

Twin Vee Powercats

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Twin Vee Powercats has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Gildan Activewear

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Gildan Activewear has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Gildan Activewear is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Twin Vee and Gildan Activewear

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

The idea behind Twin Vee Powercats and Gildan Activewear 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.