Correlation Between Gencor Industries and Intergroup

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

By analyzing existing cross correlation between Gencor Industries and The Intergroup, you can compare the effects of market volatilities on Gencor Industries and Intergroup 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 Gencor Industries with a short position of Intergroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gencor Industries and Intergroup.

Diversification Opportunities for Gencor Industries and Intergroup

0.64

Correlation Coefficient

Gencor Industries  Intergroup

Poor diversification

The 3 months correlation between Gencor and Intergroup is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Gencor Industries and The Intergroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intergroup and Gencor Industries 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 Gencor Industries are associated (or correlated) with Intergroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intergroup has no effect on the direction of Gencor Industries i.e., Gencor Industries and Intergroup go up and down completely randomly.

Pair Corralation between Gencor Industries and Intergroup

Given the investment horizon of 90 days Gencor Industries is expected to under-perform the Intergroup. But the stock apears to be less risky and, when comparing its historical volatility, Gencor Industries is 1.24 times less risky than Intergroup. The stock trades about -0.17 of its potential returns per unit of risk. The The Intergroup is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  1,427  in The Intergroup on December 27, 2024 and sell it today you would lose (163.00) from holding The Intergroup or give up 11.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Gencor Industries  vs.  The Intergroup

Gencor Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gencor Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Intergroup

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Intergroup has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Gencor Industries and Intergroup

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

The idea behind Gencor Industries and The Intergroup 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.