Correlation Between Monro Muffler and Gentex
Can any of the company-specific risk be diversified away by investing in both Monro Muffler and Gentex 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 Monro Muffler and Gentex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monro Muffler Brake and Gentex, you can compare the effects of market volatilities on Monro Muffler and Gentex 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 Monro Muffler with a short position of Gentex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monro Muffler and Gentex.
Diversification Opportunities for Monro Muffler and Gentex
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Monro and Gentex is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Monro Muffler Brake and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex and Monro Muffler 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 Monro Muffler Brake are associated (or correlated) with Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of Monro Muffler i.e., Monro Muffler and Gentex go up and down completely randomly.
Pair Corralation between Monro Muffler and Gentex
Given the investment horizon of 90 days Monro Muffler Brake is expected to generate 1.3 times more return on investment than Gentex. However, Monro Muffler is 1.3 times more volatile than Gentex. It trades about -0.13 of its potential returns per unit of risk. Gentex is currently generating about -0.27 per unit of risk. If you would invest 2,164 in Monro Muffler Brake on November 18, 2024 and sell it today you would lose (186.00) from holding Monro Muffler Brake or give up 8.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monro Muffler Brake vs. Gentex
Performance |
| Timeline |
| Monro Muffler Brake |
| Gentex |
Monro Muffler and Gentex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monro Muffler and Gentex
The main advantage of trading using opposite Monro Muffler and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monro Muffler position performs unexpectedly, Gentex 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 Gentex will offset losses from the drop in Gentex's long position.| Monro Muffler vs. Motorcar Parts of | Monro Muffler vs. Standard Motor Products | Monro Muffler vs. Stoneridge | Monro Muffler vs. Douglas Dynamics |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |