Correlation Between Gentex and Enviri

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

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

Diversification Opportunities for Gentex and Enviri

0.22

Correlation Coefficient

Gentex  Enviri

Modest diversification

The 3 months correlation between Gentex and Enviri is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and Enviri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enviri 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 Enviri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enviri has no effect on the direction of Gentex i.e., Gentex and Enviri go up and down completely randomly.

Pair Corralation between Gentex and Enviri

Given the investment horizon of 90 days Gentex is expected to under-perform the Enviri. But the stock apears to be less risky and, when comparing its historical volatility, Gentex is 1.98 times less risky than Enviri. The stock trades about -0.18 of its potential returns per unit of risk. The Enviri is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  763.00  in Enviri on December 20, 2024 and sell it today you would lose (76.00) from holding Enviri or give up 9.96% of portfolio value over 90 days.

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

Gentex  vs.  Enviri

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.

Enviri

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enviri has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Gentex and Enviri

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

The idea behind Gentex and Enviri 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.