Correlation Between 26875PAN1 and Gentex

Can any of the company-specific risk be diversified away by investing in both 26875PAN1 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 26875PAN1 and Gentex into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EOG RES INC and Gentex, you can compare the effects of market volatilities on 26875PAN1 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 26875PAN1 with a short position of Gentex. Check out your portfolio center. Please also check ongoing floating volatility patterns of 26875PAN1 and Gentex.

Diversification Opportunities for 26875PAN1 and Gentex

-0.57

Correlation Coefficient

26875PAN1  Gentex

Excellent diversification

The 3 months correlation between 26875PAN1 and Gentex is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding EOG RES INC and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex and 26875PAN1 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 EOG RES INC 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 26875PAN1 i.e., 26875PAN1 and Gentex go up and down completely randomly.

Pair Corralation between 26875PAN1 and Gentex

Assuming the 90 days trading horizon EOG RES INC is expected to generate 0.36 times more return on investment than Gentex. However, EOG RES INC is 2.79 times less risky than Gentex. It trades about 0.01 of its potential returns per unit of risk. Gentex is currently generating about -0.17 per unit of risk. If you would invest  8,896  in EOG RES INC on December 23, 2024 and sell it today you would earn a total of  19.00  from holding EOG RES INC or generate 0.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

EOG RES INC  vs.  Gentex

EOG RES INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days EOG RES INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26875PAN1 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with 26875PAN1 and Gentex

The main advantage of trading using opposite 26875PAN1 and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 26875PAN1 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 EOG RES INC 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.