Correlation Between Gentherm and Superior Industries
Can any of the company-specific risk be diversified away by investing in both Gentherm and Superior Industries 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 Gentherm and Superior Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gentherm and Superior Industries International, you can compare the effects of market volatilities on Gentherm and Superior Industries 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 Gentherm with a short position of Superior Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentherm and Superior Industries.
Diversification Opportunities for Gentherm and Superior Industries
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gentherm and Superior is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Gentherm and Superior Industries Internatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Industries and Gentherm 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 Gentherm are associated (or correlated) with Superior Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Industries has no effect on the direction of Gentherm i.e., Gentherm and Superior Industries go up and down completely randomly.
Pair Corralation between Gentherm and Superior Industries
Given the investment horizon of 90 days Gentherm is expected to generate 0.72 times more return on investment than Superior Industries. However, Gentherm is 1.4 times less risky than Superior Industries. It trades about -0.06 of its potential returns per unit of risk. Superior Industries International is currently generating about -0.09 per unit of risk. If you would invest 5,111 in Gentherm on August 24, 2024 and sell it today you would lose (848.00) from holding Gentherm or give up 16.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Gentherm vs. Superior Industries Internatio
Performance |
| Timeline |
| Gentherm |
| Superior Industries |
Gentherm and Superior Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gentherm and Superior Industries
The main advantage of trading using opposite Gentherm and Superior Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentherm position performs unexpectedly, Superior Industries 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 Superior Industries will offset losses from the drop in Superior Industries' long position.| Gentherm vs. Monro Muffler Brake | Gentherm vs. Motorcar Parts of | Gentherm vs. Standard Motor Products | Gentherm vs. Stoneridge |
| Superior Industries vs. Monro Muffler Brake | Superior Industries vs. Dorman Products | Superior Industries vs. Motorcar Parts of | Superior Industries vs. Gentherm |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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