Correlation Between 3M and Genworth Financial
Can any of the company-specific risk be diversified away by investing in both 3M and Genworth Financial 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 3M and Genworth Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3M Company and Genworth Financial, you can compare the effects of market volatilities on 3M and Genworth Financial 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 3M with a short position of Genworth Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and Genworth Financial.
Diversification Opportunities for 3M and Genworth Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 3M and Genworth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and Genworth Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genworth Financial and 3M 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 3M Company are associated (or correlated) with Genworth Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genworth Financial has no effect on the direction of 3M i.e., 3M and Genworth Financial go up and down completely randomly.
Pair Corralation between 3M and Genworth Financial
If you would invest 185,300 in 3M Company on September 23, 2024 and sell it today you would earn a total of 72,600 from holding 3M Company or generate 39.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
3M Company vs. Genworth Financial
Performance |
| Timeline |
| 3M Company |
| Genworth Financial |
3M and Genworth Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3M and Genworth Financial
The main advantage of trading using opposite 3M and Genworth Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M position performs unexpectedly, Genworth Financial 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 Genworth Financial will offset losses from the drop in Genworth Financial's long position.| 3M vs. Genworth Financial | 3M vs. DXC Technology | 3M vs. First Republic Bank | 3M vs. Verizon Communications |
| Genworth Financial vs. Grupo Nacional Provincial | Genworth Financial vs. Pea Verde SAB | Genworth Financial vs. Grupo Profuturo SAB | Genworth Financial vs. Berkshire Hathaway |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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