Correlation Between Gentex and Estrella Immunopharma

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

By analyzing existing cross correlation between Gentex and Estrella Immunopharma, you can compare the effects of market volatilities on Gentex and Estrella Immunopharma 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 Estrella Immunopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentex and Estrella Immunopharma.

Diversification Opportunities for Gentex and Estrella Immunopharma

0.04

Correlation Coefficient

Gentex  Estrella Immunopharma

Significant diversification

The 3 months correlation between Gentex and Estrella is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and Estrella Immunopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Estrella Immunopharma 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 Estrella Immunopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Estrella Immunopharma has no effect on the direction of Gentex i.e., Gentex and Estrella Immunopharma go up and down completely randomly.

Pair Corralation between Gentex and Estrella Immunopharma

Given the investment horizon of 90 days Gentex is expected to generate 2.03 times less return on investment than Estrella Immunopharma. But when comparing it to its historical volatility, Gentex is 8.77 times less risky than Estrella Immunopharma. It trades about 0.03 of its potential returns per unit of risk. Estrella Immunopharma is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,022  in Estrella Immunopharma on September 16, 2024 and sell it today you would lose (903.00) from holding Estrella Immunopharma or give up 88.36% of portfolio value over 90 days.

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

Gentex  vs.  Estrella Immunopharma

Gentex

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gentex are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Gentex may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Estrella Immunopharma

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Estrella Immunopharma are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain essential indicators, Estrella Immunopharma sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gentex and Estrella Immunopharma

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

The idea behind Gentex and Estrella Immunopharma 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.