Correlation Between INFORMATION SVC and Gentex

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

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

Diversification Opportunities for INFORMATION SVC and Gentex

0.68

Correlation Coefficient

INFORMATION SVC  Gentex

Poor diversification

The 3 months correlation between INFORMATION and Gentex is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding INFORMATION SVC GRP and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex and INFORMATION SVC 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 INFORMATION SVC GRP 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 INFORMATION SVC i.e., INFORMATION SVC and Gentex go up and down completely randomly.

Pair Corralation between INFORMATION SVC and Gentex

If you would invest (100.00) in Gentex on October 10, 2024 and sell it today you would earn a total of  100.00  from holding Gentex or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.0%
Values	Daily Returns

INFORMATION SVC GRP  vs.  Gentex

INFORMATION SVC GRP

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in INFORMATION SVC GRP are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, INFORMATION SVC reported solid returns over the last few months and may actually be approaching a breakup point.

Gentex

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Gentex has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Gentex is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with INFORMATION SVC and Gentex

The main advantage of trading using opposite INFORMATION SVC and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INFORMATION SVC 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 INFORMATION SVC GRP 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.