Correlation Between Gamma Communications and US Physical

Can any of the company-specific risk be diversified away by investing in both Gamma Communications and US Physical 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 Gamma Communications and US Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gamma Communications plc and US Physical Therapy, you can compare the effects of market volatilities on Gamma Communications and US Physical 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 Gamma Communications with a short position of US Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamma Communications and US Physical.

Diversification Opportunities for Gamma Communications and US Physical

-0.34

Correlation Coefficient

Gamma Communications  US Physical

Very good diversification

The 3 months correlation between Gamma and UPH is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Gamma Communications plc and US Physical Therapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Physical Therapy and Gamma Communications 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 Gamma Communications plc are associated (or correlated) with US Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Physical Therapy has no effect on the direction of Gamma Communications i.e., Gamma Communications and US Physical go up and down completely randomly.

Pair Corralation between Gamma Communications and US Physical

Assuming the 90 days horizon Gamma Communications plc is expected to under-perform the US Physical. In addition to that, Gamma Communications is 1.32 times more volatile than US Physical Therapy. It trades about -0.09 of its total potential returns per unit of risk. US Physical Therapy is currently generating about 0.05 per unit of volatility. If you would invest  6,064  in US Physical Therapy on April 25, 2025 and sell it today you would earn a total of  336.00  from holding US Physical Therapy or generate 5.54% return on investment over 90 days.

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

Gamma Communications plc  vs.  US Physical Therapy

Gamma Communications plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gamma Communications plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

US Physical Therapy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in US Physical Therapy are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, US Physical may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Gamma Communications and US Physical

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

The idea behind Gamma Communications plc and US Physical Therapy 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.