Correlation Between GoPro and Target

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

By analyzing existing cross correlation between GoPro Inc and Target, you can compare the effects of market volatilities on GoPro and Target 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 Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoPro and Target.

Diversification Opportunities for GoPro and Target

0.09

Correlation Coefficient

GoPro  Target

Significant diversification

The 3 months correlation between GoPro and Target is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding GoPro Inc and Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target 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 Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target has no effect on the direction of GoPro i.e., GoPro and Target go up and down completely randomly.

Pair Corralation between GoPro and Target

Assuming the 90 days trading horizon GoPro Inc is expected to generate 4.26 times more return on investment than Target. However, GoPro is 4.26 times more volatile than Target. It trades about 0.13 of its potential returns per unit of risk. Target is currently generating about 0.07 per unit of risk. If you would invest  285.00  in GoPro Inc on April 22, 2025 and sell it today you would earn a total of  199.00  from holding GoPro Inc or generate 69.82% return on investment over 90 days.

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

GoPro Inc  vs.  Target

GoPro Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GoPro Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, GoPro sustained solid returns over the last few months and may actually be approaching a breakup point.

Target

Risk-Adjusted Performance

Modest

Over the last 90 days Target has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, Target may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with GoPro and Target

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

The idea behind GoPro Inc and Target 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.