Correlation Between Genuine Parts and Independence Realty
Can any of the company-specific risk be diversified away by investing in both Genuine Parts and Independence Realty 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 Independence Realty 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 Independence Realty Trust, you can compare the effects of market volatilities on Genuine Parts and Independence Realty 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 Independence Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genuine Parts and Independence Realty.
Diversification Opportunities for Genuine Parts and Independence Realty
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Genuine and Independence is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Genuine Parts Co and Independence Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Independence Realty Trust 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 Independence Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Independence Realty Trust has no effect on the direction of Genuine Parts i.e., Genuine Parts and Independence Realty go up and down completely randomly.
Pair Corralation between Genuine Parts and Independence Realty
Considering the 90-day investment horizon Genuine Parts Co is expected to generate 1.29 times more return on investment than Independence Realty. However, Genuine Parts is 1.29 times more volatile than Independence Realty Trust. It trades about 0.26 of its potential returns per unit of risk. Independence Realty Trust is currently generating about 0.29 per unit of risk. If you would invest 11,311 in Genuine Parts Co on August 25, 2024 and sell it today you would earn a total of 1,169 from holding Genuine Parts Co or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genuine Parts Co vs. Independence Realty Trust
Performance |
| Timeline |
| Genuine Parts |
| Independence Realty Trust |
Genuine Parts and Independence Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genuine Parts and Independence Realty
The main advantage of trading using opposite Genuine Parts and Independence Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genuine Parts position performs unexpectedly, Independence Realty 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 Independence Realty will offset losses from the drop in Independence Realty's long position.| Genuine Parts vs. Steven Madden | Genuine Parts vs. Vera Bradley | Genuine Parts vs. Caleres | Genuine Parts vs. Rocky Brands |
| Independence Realty vs. Apartment Investment and | Independence Realty vs. Clipper Realty | Independence Realty vs. BRT Realty Trust | Independence Realty vs. UDR Inc |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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