Correlation Between Genuine Parts and Dillards
Can any of the company-specific risk be diversified away by investing in both Genuine Parts and Dillards 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 Dillards 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 Dillards, you can compare the effects of market volatilities on Genuine Parts and Dillards 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 Dillards. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genuine Parts and Dillards.
Diversification Opportunities for Genuine Parts and Dillards
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Genuine and Dillards is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Genuine Parts Co and Dillards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dillards 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 Dillards. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dillards has no effect on the direction of Genuine Parts i.e., Genuine Parts and Dillards go up and down completely randomly.
Pair Corralation between Genuine Parts and Dillards
Considering the 90-day investment horizon Genuine Parts Co is expected to under-perform the Dillards. In addition to that, Genuine Parts is 1.38 times more volatile than Dillards. It trades about -0.04 of its total potential returns per unit of risk. Dillards is currently generating about 0.14 per unit of volatility. If you would invest 38,369 in Dillards on August 30, 2024 and sell it today you would earn a total of 6,372 from holding Dillards or generate 16.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Genuine Parts Co vs. Dillards
Performance |
| Timeline |
| Genuine Parts |
| Dillards |
Genuine Parts and Dillards Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genuine Parts and Dillards
The main advantage of trading using opposite Genuine Parts and Dillards positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genuine Parts position performs unexpectedly, Dillards 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 Dillards will offset losses from the drop in Dillards' long position.| Genuine Parts vs. Dover | Genuine Parts vs. Cincinnati Financial | Genuine Parts vs. Leggett Platt Incorporated | Genuine Parts vs. WW Grainger |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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