Correlation Between Genworth Financial and United States
Can any of the company-specific risk be diversified away by investing in both Genworth Financial and United States 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 United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genworth Financial and United States Steel, you can compare the effects of market volatilities on Genworth Financial and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genworth Financial and United States.
Diversification Opportunities for Genworth Financial and United States
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Genworth and United is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Genworth Financial and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of Genworth Financial i.e., Genworth Financial and United States go up and down completely randomly.
Pair Corralation between Genworth Financial and United States
Assuming the 90 days trading horizon Genworth Financial is expected to generate 6.99 times less return on investment than United States. But when comparing it to its historical volatility, Genworth Financial is 3.54 times less risky than United States. It trades about 0.02 of its potential returns per unit of risk. United States Steel is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 50,680 in United States Steel on August 31, 2024 and sell it today you would earn a total of 31,730 from holding United States Steel or generate 62.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genworth Financial vs. United States Steel
Performance |
| Timeline |
| Genworth Financial |
| United States Steel |
Genworth Financial and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genworth Financial and United States
The main advantage of trading using opposite Genworth Financial and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genworth Financial position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Genworth Financial vs. Delta Air Lines | Genworth Financial vs. Cognizant Technology Solutions | Genworth Financial vs. Capital One Financial | Genworth Financial vs. Grupo Sports World |
| United States vs. Delta Air Lines | United States vs. Grupo Carso SAB | United States vs. McEwen Mining | United States vs. Monster Beverage Corp |
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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