Correlation Between Graco and Intevac

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

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

Diversification Opportunities for Graco and Intevac

0.33

Correlation Coefficient

Graco  Intevac

Weak diversification

The 3 months correlation between Graco and Intevac is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Graco Inc and Intevac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intevac and Graco 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 Graco Inc are associated (or correlated) with Intevac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intevac has no effect on the direction of Graco i.e., Graco and Intevac go up and down completely randomly.

Pair Corralation between Graco and Intevac

Considering the 90-day investment horizon Graco is expected to generate 11.46 times less return on investment than Intevac. But when comparing it to its historical volatility, Graco Inc is 2.36 times less risky than Intevac. It trades about 0.02 of its potential returns per unit of risk. Intevac is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  335.00  in Intevac on December 28, 2024 and sell it today you would earn a total of  65.00  from holding Intevac or generate 19.4% return on investment over 90 days.

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

Graco Inc  vs.  Intevac

Graco Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Graco Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Graco is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Intevac

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intevac are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Intevac exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Graco and Intevac

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

The idea behind Graco Inc and Intevac 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.