Correlation Between Intevac and Generac Holdings
Can any of the company-specific risk be diversified away by investing in both Intevac and Generac Holdings 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 Intevac and Generac Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intevac and Generac Holdings, you can compare the effects of market volatilities on Intevac and Generac Holdings 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 Intevac with a short position of Generac Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intevac and Generac Holdings.
Diversification Opportunities for Intevac and Generac Holdings
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Intevac and Generac is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Intevac and Generac Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generac Holdings and Intevac 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 Intevac are associated (or correlated) with Generac Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generac Holdings has no effect on the direction of Intevac i.e., Intevac and Generac Holdings go up and down completely randomly.
Pair Corralation between Intevac and Generac Holdings
Given the investment horizon of 90 days Intevac is expected to under-perform the Generac Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Intevac is 1.08 times less risky than Generac Holdings. The stock trades about -0.05 of its potential returns per unit of risk. The Generac Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 9,429 in Generac Holdings on August 27, 2024 and sell it today you would earn a total of 9,479 from holding Generac Holdings or generate 100.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intevac vs. Generac Holdings
Performance |
| Timeline |
| Intevac |
| Generac Holdings |
Intevac and Generac Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intevac and Generac Holdings
The main advantage of trading using opposite Intevac and Generac Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intevac position performs unexpectedly, Generac Holdings 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 Generac Holdings will offset losses from the drop in Generac Holdings' long position.| Intevac vs. Innovative Solutions and | Intevac vs. Heidrick Struggles International | Intevac vs. ICF International | Intevac vs. PDF Solutions |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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