Correlation Between Gencor Industries and Kubota
Can any of the company-specific risk be diversified away by investing in both Gencor Industries and Kubota 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 Kubota into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gencor Industries and Kubota, you can compare the effects of market volatilities on Gencor Industries and Kubota 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 Kubota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gencor Industries and Kubota.
Diversification Opportunities for Gencor Industries and Kubota
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gencor and Kubota is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Gencor Industries and Kubota in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kubota 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 Kubota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kubota has no effect on the direction of Gencor Industries i.e., Gencor Industries and Kubota go up and down completely randomly.
Pair Corralation between Gencor Industries and Kubota
Given the investment horizon of 90 days Gencor Industries is expected to generate 1.18 times more return on investment than Kubota. However, Gencor Industries is 1.18 times more volatile than Kubota. It trades about 0.2 of its potential returns per unit of risk. Kubota is currently generating about -0.15 per unit of risk. If you would invest 1,999 in Gencor Industries on August 24, 2024 and sell it today you would earn a total of 235.00 from holding Gencor Industries or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gencor Industries vs. Kubota
Performance |
| Timeline |
| Gencor Industries |
| Kubota |
Gencor Industries and Kubota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gencor Industries and Kubota
The main advantage of trading using opposite Gencor Industries and Kubota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gencor Industries position performs unexpectedly, Kubota 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 Kubota will offset losses from the drop in Kubota's long position.| Gencor Industries vs. Alamo Group | Gencor Industries vs. Manitowoc | Gencor Industries vs. Manitex International | Gencor Industries vs. Columbus McKinnon |
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 CEOs Directory module to screen CEOs from public companies around the world.
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