Correlation Between Genuine Parts and Winmark
Can any of the company-specific risk be diversified away by investing in both Genuine Parts and Winmark 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 Winmark 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 Winmark, you can compare the effects of market volatilities on Genuine Parts and Winmark 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 Winmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genuine Parts and Winmark.
Diversification Opportunities for Genuine Parts and Winmark
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Genuine and Winmark is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Genuine Parts Co and Winmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winmark 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 Winmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winmark has no effect on the direction of Genuine Parts i.e., Genuine Parts and Winmark go up and down completely randomly.
Pair Corralation between Genuine Parts and Winmark
Considering the 90-day investment horizon Genuine Parts Co is expected to generate 0.86 times more return on investment than Winmark. However, Genuine Parts Co is 1.17 times less risky than Winmark. It trades about 0.19 of its potential returns per unit of risk. Winmark is currently generating about -0.1 per unit of risk. If you would invest 11,852 in Genuine Parts Co on November 18, 2024 and sell it today you would earn a total of 638.00 from holding Genuine Parts Co or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genuine Parts Co vs. Winmark
Performance |
| Timeline |
| Genuine Parts |
| Winmark |
Genuine Parts and Winmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genuine Parts and Winmark
The main advantage of trading using opposite Genuine Parts and Winmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genuine Parts position performs unexpectedly, Winmark 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 Winmark will offset losses from the drop in Winmark's long position.| Genuine Parts vs. Dover | Genuine Parts vs. Cincinnati Financial | Genuine Parts vs. Leggett Platt Incorporated | Genuine Parts vs. WW Grainger |
| Winmark vs. Mesa Laboratories | Winmark vs. Utah Medical Products | Winmark vs. Weyco Group | Winmark vs. Diamond Hill Investment |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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