Correlation Between Gentex and Xos Equity
Can any of the company-specific risk be diversified away by investing in both Gentex and Xos Equity 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 Xos Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gentex and Xos Equity Warrants, you can compare the effects of market volatilities on Gentex and Xos Equity 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 Xos Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentex and Xos Equity.
Diversification Opportunities for Gentex and Xos Equity
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gentex and Xos is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and Xos Equity Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xos Equity Warrants 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 Xos Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xos Equity Warrants has no effect on the direction of Gentex i.e., Gentex and Xos Equity go up and down completely randomly.
Pair Corralation between Gentex and Xos Equity
Given the investment horizon of 90 days Gentex is expected to generate 0.07 times more return on investment than Xos Equity. However, Gentex is 13.9 times less risky than Xos Equity. It trades about -0.04 of its potential returns per unit of risk. Xos Equity Warrants is currently generating about -0.23 per unit of risk. If you would invest 3,130 in Gentex on August 29, 2024 and sell it today you would lose (42.00) from holding Gentex or give up 1.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gentex vs. Xos Equity Warrants
Performance |
| Timeline |
| Gentex |
| Xos Equity Warrants |
Gentex and Xos Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gentex and Xos Equity
The main advantage of trading using opposite Gentex and Xos Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentex position performs unexpectedly, Xos Equity 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 Xos Equity will offset losses from the drop in Xos Equity's long position.The idea behind Gentex and Xos Equity Warrants 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.| Xos Equity vs. Gentex | Xos Equity vs. Adient PLC | Xos Equity vs. Autoliv | Xos Equity vs. Fox Factory Holding |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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