Correlation Between 456837AV5 and Gentex

Can any of the company-specific risk be diversified away by investing in both 456837AV5 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 456837AV5 and Gentex into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ING GROEP NV and Gentex, you can compare the effects of market volatilities on 456837AV5 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 456837AV5 with a short position of Gentex. Check out your portfolio center. Please also check ongoing floating volatility patterns of 456837AV5 and Gentex.

Diversification Opportunities for 456837AV5 and Gentex

0.66

Correlation Coefficient

456837AV5  Gentex

Poor diversification

The 3 months correlation between 456837AV5 and Gentex is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ING GROEP NV and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex and 456837AV5 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 ING GROEP NV 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 456837AV5 i.e., 456837AV5 and Gentex go up and down completely randomly.

Pair Corralation between 456837AV5 and Gentex

Assuming the 90 days trading horizon 456837AV5 is expected to generate 7.83 times less return on investment than Gentex. But when comparing it to its historical volatility, ING GROEP NV is 1.97 times less risky than Gentex. It trades about 0.0 of its potential returns per unit of risk. Gentex is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,877  in Gentex on October 23, 2024 and sell it today you would lose (57.00) from holding Gentex or give up 1.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	72.73%
Values	Daily Returns

ING GROEP NV  vs.  Gentex

ING GROEP NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ING GROEP NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile 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 ING GROEP NV 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 456837AV5 and Gentex

The main advantage of trading using opposite 456837AV5 and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 456837AV5 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 ING GROEP NV 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.