Correlation Between Gentex and Beyond Meat
Can any of the company-specific risk be diversified away by investing in both Gentex and Beyond Meat 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 Gentex and Beyond Meat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gentex and Beyond Meat, you can compare the effects of market volatilities on Gentex and Beyond Meat 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 Gentex with a short position of Beyond Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentex and Beyond Meat.
Diversification Opportunities for Gentex and Beyond Meat
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gentex and Beyond is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat and Gentex 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 Gentex are associated (or correlated) with Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of Gentex i.e., Gentex and Beyond Meat go up and down completely randomly.
Pair Corralation between Gentex and Beyond Meat
Given the investment horizon of 90 days Gentex is expected to under-perform the Beyond Meat. But the stock apears to be less risky and, when comparing its historical volatility, Gentex is 1.66 times less risky than Beyond Meat. The stock trades about -0.33 of its potential returns per unit of risk. The Beyond Meat is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 413.00 in Beyond Meat on November 27, 2024 and sell it today you would lose (27.00) from holding Beyond Meat or give up 6.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gentex vs. Beyond Meat
Performance |
| Timeline |
| Gentex |
| Beyond Meat |
Gentex and Beyond Meat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gentex and Beyond Meat
The main advantage of trading using opposite Gentex and Beyond Meat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentex position performs unexpectedly, Beyond Meat 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 Beyond Meat will offset losses from the drop in Beyond Meat's long position.The idea behind Gentex and Beyond Meat 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.| Beyond Meat vs. Kraft Heinz Co | Beyond Meat vs. Hormel Foods | Beyond Meat vs. Kellanova | Beyond Meat vs. General Mills |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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