Correlation Between Centurion Acquisition and Genuine Parts

Can any of the company-specific risk be diversified away by investing in both Centurion Acquisition and Genuine Parts 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 Centurion Acquisition and Genuine Parts into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Centurion Acquisition Corp and Genuine Parts Co, you can compare the effects of market volatilities on Centurion Acquisition and Genuine Parts 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 Centurion Acquisition with a short position of Genuine Parts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centurion Acquisition and Genuine Parts.

Diversification Opportunities for Centurion Acquisition and Genuine Parts

-0.3

Correlation Coefficient

Centurion Acquisition  Genuine Parts

Very good diversification

The 3 months correlation between Centurion and Genuine is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Centurion Acquisition Corp and Genuine Parts Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genuine Parts and Centurion Acquisition 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 Centurion Acquisition Corp are associated (or correlated) with Genuine Parts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genuine Parts has no effect on the direction of Centurion Acquisition i.e., Centurion Acquisition and Genuine Parts go up and down completely randomly.

Pair Corralation between Centurion Acquisition and Genuine Parts

Considering the 90-day investment horizon Centurion Acquisition Corp is expected to under-perform the Genuine Parts. In addition to that, Centurion Acquisition is 5.09 times more volatile than Genuine Parts Co. It trades about -0.09 of its total potential returns per unit of risk. Genuine Parts Co is currently generating about -0.03 per unit of volatility. If you would invest  16,024  in Genuine Parts Co on October 26, 2024 and sell it today you would lose (4,301) from holding Genuine Parts Co or give up 26.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	24.29%
Values	Daily Returns

Centurion Acquisition Corp  vs.  Genuine Parts Co

Centurion Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centurion Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Genuine Parts

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Genuine Parts Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Genuine Parts is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Centurion Acquisition and Genuine Parts

The main advantage of trading using opposite Centurion Acquisition and Genuine Parts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centurion Acquisition position performs unexpectedly, Genuine Parts 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 Genuine Parts will offset losses from the drop in Genuine Parts' long position.

The idea behind Centurion Acquisition Corp and Genuine Parts Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.