Correlation Between United States and Genworth Financial
Can any of the company-specific risk be diversified away by investing in both United States 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 United States and Genworth Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Genworth Financial, you can compare the effects of market volatilities on United States 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 United States with a short position of Genworth Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Genworth Financial.
Diversification Opportunities for United States and Genworth Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Genworth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Genworth Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genworth Financial and United States 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 United States Steel 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 United States i.e., United States and Genworth Financial go up and down completely randomly.
Pair Corralation between United States and Genworth Financial
Given the investment horizon of 90 days United States Steel is expected to generate 3.54 times more return on investment than Genworth Financial. However, United States is 3.54 times more volatile than Genworth Financial. It trades about 0.05 of its potential returns per unit of risk. Genworth Financial is currently generating about 0.02 per unit of risk. If you would invest 50,680 in United States Steel on August 31, 2024 and sell it today you would earn a total of 31,730 from holding United States Steel or generate 62.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. Genworth Financial
Performance |
| Timeline |
| United States Steel |
| Genworth Financial |
United States and Genworth Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Genworth Financial
The main advantage of trading using opposite United States and Genworth Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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.| United States vs. Delta Air Lines | United States vs. Grupo Carso SAB | United States vs. McEwen Mining | United States vs. Monster Beverage Corp |
| Genworth Financial vs. Delta Air Lines | Genworth Financial vs. Cognizant Technology Solutions | Genworth Financial vs. Capital One Financial | Genworth Financial vs. Grupo Sports World |
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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