Correlation Between Gentex and Kirkland Lake

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

By analyzing existing cross correlation between Gentex and Kirkland Lake Gold, you can compare the effects of market volatilities on Gentex and Kirkland Lake 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 Kirkland Lake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentex and Kirkland Lake.

Diversification Opportunities for Gentex and Kirkland Lake

0.0

Correlation Coefficient

Gentex  Kirkland Lake

Pay attention - limited upside

The 3 months correlation between Gentex and Kirkland is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and Kirkland Lake Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kirkland Lake Gold 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 Kirkland Lake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kirkland Lake Gold has no effect on the direction of Gentex i.e., Gentex and Kirkland Lake go up and down completely randomly.

Pair Corralation between Gentex and Kirkland Lake

If you would invest (100.00) in Kirkland Lake Gold on February 6, 2024 and sell it today you would earn a total of  100.00  from holding Kirkland Lake Gold or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Gentex  vs.  Kirkland Lake Gold

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.

Kirkland Lake Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kirkland Lake Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Kirkland Lake is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Gentex and Kirkland Lake

The main advantage of trading using opposite Gentex and Kirkland Lake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentex position performs unexpectedly, Kirkland Lake 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 Kirkland Lake will offset losses from the drop in Kirkland Lake's long position.

The idea behind Gentex and Kirkland Lake Gold 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.