Correlation Between Target and GoPro

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

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

Diversification Opportunities for Target and GoPro

0.18

Correlation Coefficient

Target  GoPro

Average diversification

The 3 months correlation between Target and GoPro is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Target and GoPro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoPro Inc and Target 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 Target are associated (or correlated) with GoPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoPro Inc has no effect on the direction of Target i.e., Target and GoPro go up and down completely randomly.

Pair Corralation between Target and GoPro

Assuming the 90 days trading horizon Target is expected to generate 8.54 times less return on investment than GoPro. But when comparing it to its historical volatility, Target is 4.26 times less risky than GoPro. It trades about 0.07 of its potential returns per unit of risk. GoPro Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  285.00  in GoPro Inc on April 21, 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

Target  vs.  GoPro Inc

Target

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Target are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Target may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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.

Pair Trading with Target and GoPro

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

The idea behind Target and GoPro Inc 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.