Correlation Between Gentex and Melexis NV
Can any of the company-specific risk be diversified away by investing in both Gentex and Melexis NV 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 Melexis NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gentex and Melexis NV, you can compare the effects of market volatilities on Gentex and Melexis NV 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 Melexis NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentex and Melexis NV.
Diversification Opportunities for Gentex and Melexis NV
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gentex and Melexis is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and Melexis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melexis NV 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 Melexis NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melexis NV has no effect on the direction of Gentex i.e., Gentex and Melexis NV go up and down completely randomly.
Pair Corralation between Gentex and Melexis NV
If you would invest 3,009 in Gentex on September 4, 2024 and sell it today you would earn a total of 61.00 from holding Gentex or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gentex vs. Melexis NV
Performance |
| Timeline |
| Gentex |
| Melexis NV |
Gentex and Melexis NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gentex and Melexis NV
The main advantage of trading using opposite Gentex and Melexis NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentex position performs unexpectedly, Melexis NV 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 Melexis NV will offset losses from the drop in Melexis NV's long position.The idea behind Gentex and Melexis NV 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.| Melexis NV vs. Transportadora de Gas | Melexis NV vs. Supercom | Melexis NV vs. Semtech | Melexis NV vs. Cheniere Energy Partners |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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