Correlation Between Graco and Intevac
Can any of the company-specific risk be diversified away by investing in both Graco and Intevac 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 Graco and Intevac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graco Inc and Intevac, you can compare the effects of market volatilities on Graco and Intevac 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 Graco with a short position of Intevac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graco and Intevac.
Diversification Opportunities for Graco and Intevac
Excellent diversification
The 3 months correlation between Graco and Intevac is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Graco Inc and Intevac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intevac and Graco 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 Graco Inc are associated (or correlated) with Intevac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intevac has no effect on the direction of Graco i.e., Graco and Intevac go up and down completely randomly.
Pair Corralation between Graco and Intevac
Considering the 90-day investment horizon Graco Inc is expected to generate 0.28 times more return on investment than Intevac. However, Graco Inc is 3.56 times less risky than Intevac. It trades about 0.32 of its potential returns per unit of risk. Intevac is currently generating about -0.11 per unit of risk. If you would invest 8,252 in Graco Inc on September 2, 2024 and sell it today you would earn a total of 856.00 from holding Graco Inc or generate 10.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graco Inc vs. Intevac
Performance |
| Timeline |
| Graco Inc |
| Intevac |
Graco and Intevac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graco and Intevac
The main advantage of trading using opposite Graco and Intevac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graco position performs unexpectedly, Intevac 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 Intevac will offset losses from the drop in Intevac's long position.The idea behind Graco Inc and Intevac pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Intevac vs. Innovative Solutions and | Intevac vs. Heidrick Struggles International | Intevac vs. ICF International | Intevac vs. PDF Solutions |
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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