Correlation Between IENOVA and Gentex

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

By analyzing existing cross correlation between IENOVA 475 15 JAN 51 and Gentex, you can compare the effects of market volatilities on IENOVA 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 IENOVA with a short position of Gentex. Check out your portfolio center. Please also check ongoing floating volatility patterns of IENOVA and Gentex.

Diversification Opportunities for IENOVA and Gentex

-0.04

Correlation Coefficient

IENOVA  Gentex

Good diversification

The 3 months correlation between IENOVA and Gentex is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding IENOVA 475 15 JAN 51 and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex and IENOVA 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 IENOVA 475 15 JAN 51 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 IENOVA i.e., IENOVA and Gentex go up and down completely randomly.

Pair Corralation between IENOVA and Gentex

Assuming the 90 days trading horizon IENOVA 475 15 JAN 51 is expected to under-perform the Gentex. In addition to that, IENOVA is 1.83 times more volatile than Gentex. It trades about -0.52 of its total potential returns per unit of risk. Gentex is currently generating about -0.2 per unit of volatility. If you would invest  3,006  in Gentex on October 12, 2024 and sell it today you would lose (288.00) from holding Gentex or give up 9.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	17.07%
Values	Daily Returns

IENOVA 475 15 JAN 51  vs.  Gentex

IENOVA 475 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IENOVA 475 15 JAN 51 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for IENOVA 475 15 JAN 51 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 latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with IENOVA and Gentex

The main advantage of trading using opposite IENOVA and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IENOVA 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 IENOVA 475 15 JAN 51 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.