Correlation Between Gentex and KWG Group
Can any of the company-specific risk be diversified away by investing in both Gentex and KWG 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 Gentex and KWG Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gentex and KWG Group Holdings, you can compare the effects of market volatilities on Gentex and KWG 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 Gentex with a short position of KWG Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentex and KWG Group.
Diversification Opportunities for Gentex and KWG Group
Pay attention - limited upside
The 3 months correlation between Gentex and KWG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and KWG Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KWG Group Holdings 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 KWG Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KWG Group Holdings has no effect on the direction of Gentex i.e., Gentex and KWG Group go up and down completely randomly.
Pair Corralation between Gentex and KWG Group
Given the investment horizon of 90 days Gentex is expected to generate 0.56 times more return on investment than KWG Group. However, Gentex is 1.79 times less risky than KWG Group. It trades about 0.03 of its potential returns per unit of risk. KWG Group Holdings is currently generating about -0.05 per unit of risk. If you would invest 2,628 in Gentex on September 14, 2024 and sell it today you would earn a total of 416.00 from holding Gentex or generate 15.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gentex vs. KWG Group Holdings
Performance |
| Timeline |
| Gentex |
| KWG Group Holdings |
Gentex and KWG Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gentex and KWG Group
The main advantage of trading using opposite Gentex and KWG Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentex position performs unexpectedly, KWG 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 KWG Group will offset losses from the drop in KWG Group's long position.The idea behind Gentex and KWG Group Holdings 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.| KWG Group vs. BBB Foods | KWG Group vs. Gentex | KWG Group vs. Magna International | KWG Group vs. Where Food Comes |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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