Correlation Between Gencor Industries and AmeraMex International
Can any of the company-specific risk be diversified away by investing in both Gencor Industries and AmeraMex International 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 Gencor Industries and AmeraMex International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gencor Industries and AmeraMex International, you can compare the effects of market volatilities on Gencor Industries and AmeraMex International 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 Gencor Industries with a short position of AmeraMex International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gencor Industries and AmeraMex International.
Diversification Opportunities for Gencor Industries and AmeraMex International
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gencor and AmeraMex is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Gencor Industries and AmeraMex International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmeraMex International and Gencor Industries 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 Gencor Industries are associated (or correlated) with AmeraMex International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmeraMex International has no effect on the direction of Gencor Industries i.e., Gencor Industries and AmeraMex International go up and down completely randomly.
Pair Corralation between Gencor Industries and AmeraMex International
Given the investment horizon of 90 days Gencor Industries is expected to generate 0.2 times more return on investment than AmeraMex International. However, Gencor Industries is 4.98 times less risky than AmeraMex International. It trades about 0.22 of its potential returns per unit of risk. AmeraMex International is currently generating about -0.12 per unit of risk. If you would invest 2,015 in Gencor Industries on August 28, 2024 and sell it today you would earn a total of 227.00 from holding Gencor Industries or generate 11.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gencor Industries vs. AmeraMex International
Performance |
| Timeline |
| Gencor Industries |
| AmeraMex International |
Gencor Industries and AmeraMex International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gencor Industries and AmeraMex International
The main advantage of trading using opposite Gencor Industries and AmeraMex International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gencor Industries position performs unexpectedly, AmeraMex International 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 AmeraMex International will offset losses from the drop in AmeraMex International's long position.| Gencor Industries vs. Alamo Group | Gencor Industries vs. Manitowoc | Gencor Industries vs. Manitex International | Gencor Industries vs. Columbus McKinnon |
| AmeraMex International vs. Lion Electric Corp | AmeraMex International vs. Nikola Corp | AmeraMex International vs. Buhler Industries | AmeraMex International vs. Toyota Industries |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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