Correlation Between Gentex and Horizon Global
Can any of the company-specific risk be diversified away by investing in both Gentex and Horizon Global 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 Gentex and Horizon Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gentex and Horizon Global Corp, you can compare the effects of market volatilities on Gentex and Horizon Global 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 Gentex with a short position of Horizon Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentex and Horizon Global.
Diversification Opportunities for Gentex and Horizon Global
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gentex and Horizon is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and Horizon Global Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Global Corp and Gentex 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 Gentex are associated (or correlated) with Horizon Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Global Corp has no effect on the direction of Gentex i.e., Gentex and Horizon Global go up and down completely randomly.
Pair Corralation between Gentex and Horizon Global
Given the investment horizon of 90 days Gentex is expected to generate 16.04 times less return on investment than Horizon Global. But when comparing it to its historical volatility, Gentex is 15.79 times less risky than Horizon Global. It trades about 0.03 of its potential returns per unit of risk. Horizon Global Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 372.00 in Horizon Global Corp on January 20, 2024 and sell it today you would lose (196.00) from holding Horizon Global Corp or give up 52.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 39.39% |
| Values | Daily Returns |
Gentex vs. Horizon Global Corp
Performance |
| Timeline |
| Gentex |
| Horizon Global Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Gentex and Horizon Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gentex and Horizon Global
The main advantage of trading using opposite Gentex and Horizon Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentex position performs unexpectedly, Horizon Global 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 Horizon Global will offset losses from the drop in Horizon Global's long position.The idea behind Gentex and Horizon Global Corp 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.| Horizon Global vs. Aegean Airlines SA | Horizon Global vs. JetBlue Airways Corp | Horizon Global vs. Sun Country Airlines | Horizon Global vs. Copa Holdings SA |
Check out your portfolio center.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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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