Correlation Between Genuine Parts and PetMed Express
Can any of the company-specific risk be diversified away by investing in both Genuine Parts and PetMed Express 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 PetMed Express 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 PetMed Express, you can compare the effects of market volatilities on Genuine Parts and PetMed Express 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 PetMed Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genuine Parts and PetMed Express.
Diversification Opportunities for Genuine Parts and PetMed Express
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Genuine and PetMed is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Genuine Parts Co and PetMed Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetMed Express 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 PetMed Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetMed Express has no effect on the direction of Genuine Parts i.e., Genuine Parts and PetMed Express go up and down completely randomly.
Pair Corralation between Genuine Parts and PetMed Express
Considering the 90-day investment horizon Genuine Parts Co is expected to generate 0.5 times more return on investment than PetMed Express. However, Genuine Parts Co is 1.99 times less risky than PetMed Express. It trades about 0.0 of its potential returns per unit of risk. PetMed Express is currently generating about -0.02 per unit of risk. If you would invest 13,004 in Genuine Parts Co on August 26, 2024 and sell it today you would lose (524.00) from holding Genuine Parts Co or give up 4.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genuine Parts Co vs. PetMed Express
Performance |
| Timeline |
| Genuine Parts |
| PetMed Express |
Genuine Parts and PetMed Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genuine Parts and PetMed Express
The main advantage of trading using opposite Genuine Parts and PetMed Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genuine Parts position performs unexpectedly, PetMed Express 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 PetMed Express will offset losses from the drop in PetMed Express' long position.| Genuine Parts vs. Steven Madden | Genuine Parts vs. Vera Bradley | Genuine Parts vs. Caleres | Genuine Parts vs. Rocky Brands |
| PetMed Express vs. Oriental Culture Holding | PetMed Express vs. Hour Loop | PetMed Express vs. Qurate Retail Series | PetMed Express vs. Emerge Commerce |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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