Correlation Between Gentera SAB and Deere
Can any of the company-specific risk be diversified away by investing in both Gentera SAB and Deere 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 Gentera SAB and Deere into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gentera SAB de and Deere Company, you can compare the effects of market volatilities on Gentera SAB and Deere 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 Gentera SAB with a short position of Deere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentera SAB and Deere.
Diversification Opportunities for Gentera SAB and Deere
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gentera and Deere is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Gentera SAB de and Deere Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deere Company and Gentera SAB 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 Gentera SAB de are associated (or correlated) with Deere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deere Company has no effect on the direction of Gentera SAB i.e., Gentera SAB and Deere go up and down completely randomly.
Pair Corralation between Gentera SAB and Deere
Assuming the 90 days horizon Gentera SAB de is expected to generate 3.77 times more return on investment than Deere. However, Gentera SAB is 3.77 times more volatile than Deere Company. It trades about 0.22 of its potential returns per unit of risk. Deere Company is currently generating about 0.01 per unit of risk. If you would invest 138.00 in Gentera SAB de on January 25, 2024 and sell it today you would earn a total of 30.00 from holding Gentera SAB de or generate 21.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gentera SAB de vs. Deere Company
Performance |
| Timeline |
| Gentera SAB de |
| Deere Company |
Gentera SAB and Deere Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gentera SAB and Deere
The main advantage of trading using opposite Gentera SAB and Deere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentera SAB position performs unexpectedly, Deere 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 Deere will offset losses from the drop in Deere's long position.| Gentera SAB vs. Lilium Equity Warrants | Gentera SAB vs. Blade Air Mobility | Gentera SAB vs. HUMANA INC | Gentera SAB vs. Aquagold International |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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