Correlation Between Gentex and DIH Holdings

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

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

Diversification Opportunities for Gentex and DIH Holdings

-0.21

Correlation Coefficient

Gentex  DIH Holdings

Very good diversification

The 3 months correlation between Gentex and DIH is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and DIH Holdings US, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIH Holdings US, and Gentex 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 Gentex are associated (or correlated) with DIH Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIH Holdings US, has no effect on the direction of Gentex i.e., Gentex and DIH Holdings go up and down completely randomly.

Pair Corralation between Gentex and DIH Holdings

Given the investment horizon of 90 days Gentex is expected to under-perform the DIH Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Gentex is 21.81 times less risky than DIH Holdings. The stock trades about -0.13 of its potential returns per unit of risk. The DIH Holdings US, is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  110.00  in DIH Holdings US, on October 23, 2024 and sell it today you would earn a total of  5.00  from holding DIH Holdings US, or generate 4.55% return on investment over 90 days.

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

Gentex  vs.  DIH Holdings US,

Gentex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gentex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Gentex is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

DIH Holdings US,

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DIH Holdings US, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, DIH Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gentex and DIH Holdings

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

The idea behind Gentex and DIH Holdings US, 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.