Correlation Between Gentex and Graf Global
Can any of the company-specific risk be diversified away by investing in both Gentex and Graf Global 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 Graf Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gentex and Graf Global Corp, you can compare the effects of market volatilities on Gentex and Graf Global 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 Graf Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentex and Graf Global.
Diversification Opportunities for Gentex and Graf Global
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gentex and Graf is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and Graf Global Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graf Global Corp 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 Graf Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graf Global Corp has no effect on the direction of Gentex i.e., Gentex and Graf Global go up and down completely randomly.
Pair Corralation between Gentex and Graf Global
Given the investment horizon of 90 days Gentex is expected to under-perform the Graf Global. In addition to that, Gentex is 20.2 times more volatile than Graf Global Corp. It trades about -0.21 of its total potential returns per unit of risk. Graf Global Corp is currently generating about 0.36 per unit of volatility. If you would invest 1,007 in Graf Global Corp on November 30, 2024 and sell it today you would earn a total of 13.00 from holding Graf Global Corp or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gentex vs. Graf Global Corp
Performance |
| Timeline |
| Gentex |
| Graf Global Corp |
Gentex and Graf Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gentex and Graf Global
The main advantage of trading using opposite Gentex and Graf Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentex position performs unexpectedly, Graf Global 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 Graf Global will offset losses from the drop in Graf Global's long position.The idea behind Gentex and Graf Global Corp 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.| Graf Global vs. Qualys Inc | Graf Global vs. Luxfer Holdings PLC | Graf Global vs. Where Food Comes | Graf Global vs. American Vanguard |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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