Correlation Between Kewaunee Scientific and Gencor Industries
Can any of the company-specific risk be diversified away by investing in both Kewaunee Scientific and Gencor Industries 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 Kewaunee Scientific and Gencor Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kewaunee Scientific and Gencor Industries, you can compare the effects of market volatilities on Kewaunee Scientific and Gencor Industries 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 Kewaunee Scientific with a short position of Gencor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kewaunee Scientific and Gencor Industries.
Diversification Opportunities for Kewaunee Scientific and Gencor Industries
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kewaunee and Gencor is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kewaunee Scientific and Gencor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gencor Industries and Kewaunee Scientific 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 Kewaunee Scientific are associated (or correlated) with Gencor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gencor Industries has no effect on the direction of Kewaunee Scientific i.e., Kewaunee Scientific and Gencor Industries go up and down completely randomly.
Pair Corralation between Kewaunee Scientific and Gencor Industries
Given the investment horizon of 90 days Kewaunee Scientific is expected to under-perform the Gencor Industries. In addition to that, Kewaunee Scientific is 1.31 times more volatile than Gencor Industries. It trades about -0.19 of its total potential returns per unit of risk. Gencor Industries is currently generating about -0.16 per unit of volatility. If you would invest 1,722 in Gencor Industries on December 28, 2024 and sell it today you would lose (466.00) from holding Gencor Industries or give up 27.06% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kewaunee Scientific vs. Gencor Industries
Performance |
Timeline |
Kewaunee Scientific |
Gencor Industries |
Kewaunee Scientific and Gencor Industries Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kewaunee Scientific and Gencor Industries
The main advantage of trading using opposite Kewaunee Scientific and Gencor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kewaunee Scientific position performs unexpectedly, Gencor Industries 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 Gencor Industries will offset losses from the drop in Gencor Industries' long position.Kewaunee Scientific vs. Hamilton Beach Brands | Kewaunee Scientific vs. Mohawk Industries | Kewaunee Scientific vs. Whirlpool | Kewaunee Scientific vs. iRobot |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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