Correlation Between Gentex and Learning Tree

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

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

Diversification Opportunities for Gentex and Learning Tree

0.0

Correlation Coefficient

Gentex  Learning Tree

Pay attention - limited upside

The 3 months correlation between Gentex and Learning is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and Learning Tree International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Learning Tree Intern 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 Learning Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Learning Tree Intern has no effect on the direction of Gentex i.e., Gentex and Learning Tree go up and down completely randomly.

Pair Corralation between Gentex and Learning Tree

If you would invest (100.00) in Learning Tree International on December 20, 2024 and sell it today you would earn a total of  100.00  from holding Learning Tree International or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Gentex  vs.  Learning Tree International

Gentex

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Learning Tree Intern

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Gentex and Learning Tree

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

The idea behind Gentex and Learning Tree International 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.