Correlation Between Gen Digital and Splunk
Can any of the company-specific risk be diversified away by investing in both Gen Digital and Splunk 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 Gen Digital and Splunk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gen Digital and Splunk Inc, you can compare the effects of market volatilities on Gen Digital and Splunk 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 Gen Digital with a short position of Splunk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gen Digital and Splunk.
Diversification Opportunities for Gen Digital and Splunk
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gen and Splunk is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Gen Digital and Splunk Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Splunk Inc and Gen Digital 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 Gen Digital are associated (or correlated) with Splunk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Splunk Inc has no effect on the direction of Gen Digital i.e., Gen Digital and Splunk go up and down completely randomly.
Pair Corralation between Gen Digital and Splunk
If you would invest 2,700 in Gen Digital on August 23, 2024 and sell it today you would earn a total of 281.00 from holding Gen Digital or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Gen Digital vs. Splunk Inc
Performance |
| Timeline |
| Gen Digital |
| Splunk Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Gen Digital and Splunk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gen Digital and Splunk
The main advantage of trading using opposite Gen Digital and Splunk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gen Digital position performs unexpectedly, Splunk 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 Splunk will offset losses from the drop in Splunk's long position.| Gen Digital vs. Wex Inc | Gen Digital vs. CSG Systems International | Gen Digital vs. VeriSign | Gen Digital vs. Global Blue Group |
| Splunk vs. Crowdstrike Holdings | Splunk vs. Adobe Systems Incorporated | Splunk vs. Palantir Technologies | Splunk vs. Zscaler |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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