Correlation Between MYT Netherlands and Genuine Parts

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

By analyzing existing cross correlation between MYT Netherlands Parent and Genuine Parts Co, you can compare the effects of market volatilities on MYT Netherlands and Genuine Parts 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 MYT Netherlands with a short position of Genuine Parts. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYT Netherlands and Genuine Parts.

Diversification Opportunities for MYT Netherlands and Genuine Parts

-0.17

Correlation Coefficient

MYT Netherlands  Genuine Parts

Good diversification

The 3 months correlation between MYT and Genuine is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding MYT Netherlands Parent and Genuine Parts Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genuine Parts and MYT Netherlands 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 MYT Netherlands Parent are associated (or correlated) with Genuine Parts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genuine Parts has no effect on the direction of MYT Netherlands i.e., MYT Netherlands and Genuine Parts go up and down completely randomly.

Pair Corralation between MYT Netherlands and Genuine Parts

Given the investment horizon of 90 days MYT Netherlands Parent is expected to generate 2.78 times more return on investment than Genuine Parts. However, MYT Netherlands is 2.78 times more volatile than Genuine Parts Co. It trades about 0.1 of its potential returns per unit of risk. Genuine Parts Co is currently generating about -0.03 per unit of risk. If you would invest  273.00  in MYT Netherlands Parent on October 7, 2024 and sell it today you would earn a total of  451.00  from holding MYT Netherlands Parent or generate 165.2% return on investment over 90 days.

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

MYT Netherlands Parent  vs.  Genuine Parts Co

MYT Netherlands Parent

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MYT Netherlands Parent are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, MYT Netherlands may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Genuine Parts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genuine Parts Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with MYT Netherlands and Genuine Parts

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

The idea behind MYT Netherlands Parent and Genuine Parts Co 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.