Correlation Between Genuine Parts and Champion Technology
Can any of the company-specific risk be diversified away by investing in both Genuine Parts and Champion Technology 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 Genuine Parts and Champion Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genuine Parts Co and Champion Technology Holdings, you can compare the effects of market volatilities on Genuine Parts and Champion Technology 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 Genuine Parts with a short position of Champion Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genuine Parts and Champion Technology.
Diversification Opportunities for Genuine Parts and Champion Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Genuine and Champion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Genuine Parts Co and Champion Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Technology and Genuine Parts 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 Genuine Parts Co are associated (or correlated) with Champion Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Technology has no effect on the direction of Genuine Parts i.e., Genuine Parts and Champion Technology go up and down completely randomly.
Pair Corralation between Genuine Parts and Champion Technology
Considering the 90-day investment horizon Genuine Parts Co is expected to under-perform the Champion Technology. But the stock apears to be less risky and, when comparing its historical volatility, Genuine Parts Co is 8.15 times less risky than Champion Technology. The stock trades about -0.02 of its potential returns per unit of risk. The Champion Technology Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Champion Technology Holdings on August 28, 2024 and sell it today you would lose (13.40) from holding Champion Technology Holdings or give up 89.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Genuine Parts Co vs. Champion Technology Holdings
Performance |
| Timeline |
| Genuine Parts |
| Champion Technology |
Genuine Parts and Champion Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genuine Parts and Champion Technology
The main advantage of trading using opposite Genuine Parts and Champion Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genuine Parts position performs unexpectedly, Champion Technology 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 Champion Technology will offset losses from the drop in Champion Technology's long position.| Genuine Parts vs. Dover | Genuine Parts vs. Cincinnati Financial | Genuine Parts vs. Leggett Platt Incorporated | Genuine Parts vs. WW Grainger |
| Champion Technology vs. Two Hands Corp | Champion Technology vs. Visium Technologies | Champion Technology vs. Tautachrome | Champion Technology vs. V Group |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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