Correlation Between Gencor Industries and Kion Group
Can any of the company-specific risk be diversified away by investing in both Gencor Industries and Kion Group 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 Kion Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gencor Industries and Kion Group AG, you can compare the effects of market volatilities on Gencor Industries and Kion Group 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 Kion Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gencor Industries and Kion Group.
Diversification Opportunities for Gencor Industries and Kion Group
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gencor and Kion is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Gencor Industries and Kion Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kion Group AG 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 Kion Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kion Group AG has no effect on the direction of Gencor Industries i.e., Gencor Industries and Kion Group go up and down completely randomly.
Pair Corralation between Gencor Industries and Kion Group
Given the investment horizon of 90 days Gencor Industries is expected to generate 0.86 times more return on investment than Kion Group. However, Gencor Industries is 1.16 times less risky than Kion Group. It trades about 0.07 of its potential returns per unit of risk. Kion Group AG is currently generating about 0.02 per unit of risk. If you would invest 1,108 in Gencor Industries on September 4, 2024 and sell it today you would earn a total of 1,092 from holding Gencor Industries or generate 98.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gencor Industries vs. Kion Group AG
Performance |
| Timeline |
| Gencor Industries |
| Kion Group AG |
Gencor Industries and Kion Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gencor Industries and Kion Group
The main advantage of trading using opposite Gencor Industries and Kion Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gencor Industries position performs unexpectedly, Kion Group 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 Kion Group will offset losses from the drop in Kion Group's long position.| Gencor Industries vs. Alamo Group | Gencor Industries vs. Manitowoc | Gencor Industries vs. Manitex International | Gencor Industries vs. Columbus McKinnon |
| Kion Group vs. Rev Group | Kion Group vs. Gencor Industries | Kion Group vs. Alamo Group | Kion Group vs. Wabash National |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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