Correlation Between Genuine Parts and ATRenew
Can any of the company-specific risk be diversified away by investing in both Genuine Parts and ATRenew 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 ATRenew 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 ATRenew Inc DRC, you can compare the effects of market volatilities on Genuine Parts and ATRenew 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 ATRenew. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genuine Parts and ATRenew.
Diversification Opportunities for Genuine Parts and ATRenew
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Genuine and ATRenew is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Genuine Parts Co and ATRenew Inc DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRenew Inc DRC 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 ATRenew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRenew Inc DRC has no effect on the direction of Genuine Parts i.e., Genuine Parts and ATRenew go up and down completely randomly.
Pair Corralation between Genuine Parts and ATRenew
Considering the 90-day investment horizon Genuine Parts Co is expected to generate 0.42 times more return on investment than ATRenew. However, Genuine Parts Co is 2.38 times less risky than ATRenew. It trades about 0.24 of its potential returns per unit of risk. ATRenew Inc DRC is currently generating about 0.07 per unit of risk. If you would invest 11,835 in Genuine Parts Co on August 28, 2024 and sell it today you would earn a total of 1,112 from holding Genuine Parts Co or generate 9.4% 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. ATRenew Inc DRC
Performance |
| Timeline |
| Genuine Parts |
| ATRenew Inc DRC |
Genuine Parts and ATRenew Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genuine Parts and ATRenew
The main advantage of trading using opposite Genuine Parts and ATRenew positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genuine Parts position performs unexpectedly, ATRenew 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 ATRenew will offset losses from the drop in ATRenew's long position.| Genuine Parts vs. Steven Madden | Genuine Parts vs. Vera Bradley | Genuine Parts vs. Caleres | Genuine Parts vs. Rocky Brands |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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