Correlation Between Gentex and LEGGETT
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By analyzing existing cross correlation between Gentex and LEGGETT PLATT INC, you can compare the effects of market volatilities on Gentex and LEGGETT 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 LEGGETT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentex and LEGGETT.
Diversification Opportunities for Gentex and LEGGETT
Very good diversification
The 3 months correlation between Gentex and LEGGETT is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and LEGGETT PLATT INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEGGETT PLATT INC 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 LEGGETT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEGGETT PLATT INC has no effect on the direction of Gentex i.e., Gentex and LEGGETT go up and down completely randomly.
Pair Corralation between Gentex and LEGGETT
Given the investment horizon of 90 days Gentex is expected to under-perform the LEGGETT. In addition to that, Gentex is 1.86 times more volatile than LEGGETT PLATT INC. It trades about -0.05 of its total potential returns per unit of risk. LEGGETT PLATT INC is currently generating about 0.02 per unit of volatility. If you would invest 9,200 in LEGGETT PLATT INC on September 3, 2024 and sell it today you would earn a total of 211.00 from holding LEGGETT PLATT INC or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.63% |
| Values | Daily Returns |
Gentex vs. LEGGETT PLATT INC
Performance |
| Timeline |
| Gentex |
| LEGGETT PLATT INC |
Gentex and LEGGETT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gentex and LEGGETT
The main advantage of trading using opposite Gentex and LEGGETT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentex position performs unexpectedly, LEGGETT 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 LEGGETT will offset losses from the drop in LEGGETT's long position.The idea behind Gentex and LEGGETT PLATT INC 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.| LEGGETT vs. Maanshan Iron Steel | LEGGETT vs. Parker Hannifin | LEGGETT vs. GMS Inc | LEGGETT vs. Apogee Enterprises |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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