Correlation Between LEGGETT and Gentex
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By analyzing existing cross correlation between LEGGETT PLATT INC and Gentex, you can compare the effects of market volatilities on LEGGETT 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 LEGGETT with a short position of Gentex. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEGGETT and Gentex.
Diversification Opportunities for LEGGETT and Gentex
Good diversification
The 3 months correlation between LEGGETT and Gentex is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding LEGGETT PLATT INC and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex and LEGGETT 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 LEGGETT PLATT INC 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 LEGGETT i.e., LEGGETT and Gentex go up and down completely randomly.
Pair Corralation between LEGGETT and Gentex
Assuming the 90 days trading horizon LEGGETT PLATT INC is expected to generate 35.44 times more return on investment than Gentex. However, LEGGETT is 35.44 times more volatile than Gentex. It trades about 0.04 of its potential returns per unit of risk. Gentex is currently generating about 0.0 per unit of risk. If you would invest 9,291 in LEGGETT PLATT INC on November 30, 2024 and sell it today you would lose (8.00) from holding LEGGETT PLATT INC or give up 0.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.23% |
| Values | Daily Returns |
LEGGETT PLATT INC vs. Gentex
Performance |
| Timeline |
| LEGGETT PLATT INC |
| Gentex |
LEGGETT and Gentex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LEGGETT and Gentex
The main advantage of trading using opposite LEGGETT and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEGGETT 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.| LEGGETT vs. nLIGHT Inc | LEGGETT vs. Marfrig Global Foods | LEGGETT vs. Bridgford Foods | LEGGETT vs. United Natural Foods |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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