Correlation Between Genuine Parts and Sally Beauty
Can any of the company-specific risk be diversified away by investing in both Genuine Parts and Sally Beauty 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 Sally Beauty 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 Sally Beauty Holdings, you can compare the effects of market volatilities on Genuine Parts and Sally Beauty 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 Sally Beauty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genuine Parts and Sally Beauty.
Diversification Opportunities for Genuine Parts and Sally Beauty
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Genuine and Sally is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Genuine Parts Co and Sally Beauty Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sally Beauty Holdings 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 Sally Beauty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sally Beauty Holdings has no effect on the direction of Genuine Parts i.e., Genuine Parts and Sally Beauty go up and down completely randomly.
Pair Corralation between Genuine Parts and Sally Beauty
Considering the 90-day investment horizon Genuine Parts is expected to generate 147.36 times less return on investment than Sally Beauty. But when comparing it to its historical volatility, Genuine Parts Co is 1.56 times less risky than Sally Beauty. It trades about 0.0 of its potential returns per unit of risk. Sally Beauty Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 987.00 in Sally Beauty Holdings on August 24, 2024 and sell it today you would earn a total of 326.00 from holding Sally Beauty Holdings or generate 33.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Genuine Parts Co vs. Sally Beauty Holdings
Performance |
| Timeline |
| Genuine Parts |
| Sally Beauty Holdings |
Genuine Parts and Sally Beauty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genuine Parts and Sally Beauty
The main advantage of trading using opposite Genuine Parts and Sally Beauty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genuine Parts position performs unexpectedly, Sally Beauty 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 Sally Beauty will offset losses from the drop in Sally Beauty's long position.| Genuine Parts vs. Dover | Genuine Parts vs. Cincinnati Financial | Genuine Parts vs. Leggett Platt Incorporated | Genuine Parts vs. WW Grainger |
| Sally Beauty vs. Leslies | Sally Beauty vs. National Vision Holdings | Sally Beauty vs. Sportsmans | Sally Beauty vs. MarineMax |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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