Correlation Between Genworth Financial and Goodyear Tire
Can any of the company-specific risk be diversified away by investing in both Genworth Financial and Goodyear Tire 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 Genworth Financial and Goodyear Tire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genworth Financial and The Goodyear Tire, you can compare the effects of market volatilities on Genworth Financial and Goodyear Tire 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 Genworth Financial with a short position of Goodyear Tire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genworth Financial and Goodyear Tire.
Diversification Opportunities for Genworth Financial and Goodyear Tire
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Genworth and Goodyear is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Genworth Financial and The Goodyear Tire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodyear Tire and Genworth Financial 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 Genworth Financial are associated (or correlated) with Goodyear Tire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodyear Tire has no effect on the direction of Genworth Financial i.e., Genworth Financial and Goodyear Tire go up and down completely randomly.
Pair Corralation between Genworth Financial and Goodyear Tire
Assuming the 90 days trading horizon Genworth Financial is expected to generate 1.29 times less return on investment than Goodyear Tire. But when comparing it to its historical volatility, Genworth Financial is 3.28 times less risky than Goodyear Tire. It trades about 0.01 of its potential returns per unit of risk. The Goodyear Tire is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 21,000 in The Goodyear Tire on October 30, 2024 and sell it today you would lose (2,900) from holding The Goodyear Tire or give up 13.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genworth Financial vs. The Goodyear Tire
Performance |
| Timeline |
| Genworth Financial |
| Goodyear Tire |
Genworth Financial and Goodyear Tire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genworth Financial and Goodyear Tire
The main advantage of trading using opposite Genworth Financial and Goodyear Tire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genworth Financial position performs unexpectedly, Goodyear Tire 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 Goodyear Tire will offset losses from the drop in Goodyear Tire's long position.| Genworth Financial vs. Deutsche Bank Aktiengesellschaft | Genworth Financial vs. Prudential Financial | Genworth Financial vs. UnitedHealth Group Incorporated | Genworth Financial vs. First Republic Bank |
| Goodyear Tire vs. McEwen Mining | Goodyear Tire vs. FibraHotel | Goodyear Tire vs. CVS Health | Goodyear Tire vs. Southern Copper |
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.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |