Correlation Between Old Dominion and Genus Plc
Can any of the company-specific risk be diversified away by investing in both Old Dominion and Genus Plc 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 Old Dominion and Genus Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Dominion Freight and Genus plc, you can compare the effects of market volatilities on Old Dominion and Genus Plc 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 Old Dominion with a short position of Genus Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Dominion and Genus Plc.
Diversification Opportunities for Old Dominion and Genus Plc
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Old and Genus is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Old Dominion Freight and Genus plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genus plc and Old Dominion 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 Old Dominion Freight are associated (or correlated) with Genus Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genus plc has no effect on the direction of Old Dominion i.e., Old Dominion and Genus Plc go up and down completely randomly.
Pair Corralation between Old Dominion and Genus Plc
Given the investment horizon of 90 days Old Dominion Freight is expected to generate 1.23 times more return on investment than Genus Plc. However, Old Dominion is 1.23 times more volatile than Genus plc. It trades about 0.05 of its potential returns per unit of risk. Genus plc is currently generating about -0.05 per unit of risk. If you would invest 14,832 in Old Dominion Freight on September 5, 2024 and sell it today you would earn a total of 7,027 from holding Old Dominion Freight or generate 47.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Dominion Freight vs. Genus plc
Performance |
| Timeline |
| Old Dominion Freight |
| Genus plc |
Old Dominion and Genus Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Dominion and Genus Plc
The main advantage of trading using opposite Old Dominion and Genus Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Dominion position performs unexpectedly, Genus Plc 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 Genus Plc will offset losses from the drop in Genus Plc's long position.| Old Dominion vs. ArcBest Corp | Old Dominion vs. Marten Transport | Old Dominion vs. Werner Enterprises | Old Dominion vs. Knight Transportation |
| Genus Plc vs. Cardinal Health | Genus Plc vs. Verra Mobility Corp | Genus Plc vs. Old Dominion Freight | Genus Plc vs. TFI International |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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