Correlation Between 26442CAM6 and Gentex

Can any of the company-specific risk be diversified away by investing in both 26442CAM6 and Gentex 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 26442CAM6 and Gentex into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DUKE ENERGY CAROLINAS and Gentex, you can compare the effects of market volatilities on 26442CAM6 and Gentex 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 26442CAM6 with a short position of Gentex. Check out your portfolio center. Please also check ongoing floating volatility patterns of 26442CAM6 and Gentex.

Diversification Opportunities for 26442CAM6 and Gentex

-0.07

Correlation Coefficient

26442CAM6  Gentex

Good diversification

The 3 months correlation between 26442CAM6 and Gentex is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding DUKE ENERGY CAROLINAS and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex and 26442CAM6 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 DUKE ENERGY CAROLINAS are associated (or correlated) with Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of 26442CAM6 i.e., 26442CAM6 and Gentex go up and down completely randomly.

Pair Corralation between 26442CAM6 and Gentex

Assuming the 90 days trading horizon DUKE ENERGY CAROLINAS is expected to generate 65.81 times more return on investment than Gentex. However, 26442CAM6 is 65.81 times more volatile than Gentex. It trades about 0.08 of its potential returns per unit of risk. Gentex is currently generating about 0.01 per unit of risk. If you would invest  8,702  in DUKE ENERGY CAROLINAS on October 10, 2024 and sell it today you would lose (406.00) from holding DUKE ENERGY CAROLINAS or give up 4.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.36%
Values	Daily Returns

DUKE ENERGY CAROLINAS  vs.  Gentex

DUKE ENERGY CAROLINAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUKE ENERGY CAROLINAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for DUKE ENERGY CAROLINAS investors.

Gentex

Risk-Adjusted Performance

0 of 100

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 fairly strong basic indicators, Gentex is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 26442CAM6 and Gentex

The main advantage of trading using opposite 26442CAM6 and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 26442CAM6 position performs unexpectedly, Gentex 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 Gentex will offset losses from the drop in Gentex's long position.

The idea behind DUKE ENERGY CAROLINAS and Gentex 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.