Correlation Between Gentex and GEELY AUTOMOBILE
Can any of the company-specific risk be diversified away by investing in both Gentex and GEELY AUTOMOBILE 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 Gentex and GEELY AUTOMOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gentex and GEELY AUTOMOBILE, you can compare the effects of market volatilities on Gentex and GEELY AUTOMOBILE 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 Gentex with a short position of GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentex and GEELY AUTOMOBILE.
Diversification Opportunities for Gentex and GEELY AUTOMOBILE
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gentex and GEELY is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE and Gentex 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 Gentex are associated (or correlated) with GEELY AUTOMOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEELY AUTOMOBILE has no effect on the direction of Gentex i.e., Gentex and GEELY AUTOMOBILE go up and down completely randomly.
Pair Corralation between Gentex and GEELY AUTOMOBILE
Assuming the 90 days horizon Gentex is expected to under-perform the GEELY AUTOMOBILE. But the stock apears to be less risky and, when comparing its historical volatility, Gentex is 1.95 times less risky than GEELY AUTOMOBILE. The stock trades about -0.01 of its potential returns per unit of risk. The GEELY AUTOMOBILE is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 88.00 in GEELY AUTOMOBILE on October 16, 2024 and sell it today you would earn a total of 86.00 from holding GEELY AUTOMOBILE or generate 97.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gentex vs. GEELY AUTOMOBILE
Performance |
| Timeline |
| Gentex |
| GEELY AUTOMOBILE |
Gentex and GEELY AUTOMOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gentex and GEELY AUTOMOBILE
The main advantage of trading using opposite Gentex and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentex position performs unexpectedly, GEELY AUTOMOBILE 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 GEELY AUTOMOBILE will offset losses from the drop in GEELY AUTOMOBILE's long position.| Gentex vs. GEELY AUTOMOBILE | Gentex vs. T MOBILE US | Gentex vs. MOBILE FACTORY INC | Gentex vs. GungHo Online Entertainment |
| GEELY AUTOMOBILE vs. Ultra Clean Holdings | GEELY AUTOMOBILE vs. LOANDEPOT INC A | GEELY AUTOMOBILE vs. Casio Computer CoLtd | GEELY AUTOMOBILE vs. GMO Internet |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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