Correlation Between Genertec Universal and LKQ
Can any of the company-specific risk be diversified away by investing in both Genertec Universal and LKQ 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 Genertec Universal and LKQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genertec Universal Medical and LKQ Corporation, you can compare the effects of market volatilities on Genertec Universal and LKQ 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 Genertec Universal with a short position of LKQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genertec Universal and LKQ.
Diversification Opportunities for Genertec Universal and LKQ
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Genertec and LKQ is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Genertec Universal Medical and LKQ Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LKQ Corporation and Genertec Universal 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 Genertec Universal Medical are associated (or correlated) with LKQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LKQ Corporation has no effect on the direction of Genertec Universal i.e., Genertec Universal and LKQ go up and down completely randomly.
Pair Corralation between Genertec Universal and LKQ
Assuming the 90 days horizon Genertec Universal Medical is expected to generate 1.97 times more return on investment than LKQ. However, Genertec Universal is 1.97 times more volatile than LKQ Corporation. It trades about 0.11 of its potential returns per unit of risk. LKQ Corporation is currently generating about -0.03 per unit of risk. If you would invest 51.00 in Genertec Universal Medical on October 26, 2024 and sell it today you would earn a total of 6.00 from holding Genertec Universal Medical or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genertec Universal Medical vs. LKQ Corp.
Performance |
| Timeline |
| Genertec Universal |
| LKQ Corporation |
Genertec Universal and LKQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genertec Universal and LKQ
The main advantage of trading using opposite Genertec Universal and LKQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genertec Universal position performs unexpectedly, LKQ 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 LKQ will offset losses from the drop in LKQ's long position.| Genertec Universal vs. Semiconductor Manufacturing International | Genertec Universal vs. Scandinavian Tobacco Group | Genertec Universal vs. ELMOS SEMICONDUCTOR | Genertec Universal vs. SEI INVESTMENTS |
| LKQ vs. MOVIE GAMES SA | LKQ vs. Japan Medical Dynamic | LKQ vs. GAMESTOP | LKQ vs. Genertec Universal Medical |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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