Correlation Between Data IO and Gencor Industries
Can any of the company-specific risk be diversified away by investing in both Data IO and Gencor Industries 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 Data IO and Gencor Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Data IO and Gencor Industries, you can compare the effects of market volatilities on Data IO and Gencor Industries 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 Data IO with a short position of Gencor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data IO and Gencor Industries.
Diversification Opportunities for Data IO and Gencor Industries
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Data and Gencor is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Data IO and Gencor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gencor Industries and Data IO 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 Data IO are associated (or correlated) with Gencor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gencor Industries has no effect on the direction of Data IO i.e., Data IO and Gencor Industries go up and down completely randomly.
Pair Corralation between Data IO and Gencor Industries
Given the investment horizon of 90 days Data IO is expected to generate 0.73 times more return on investment than Gencor Industries. However, Data IO is 1.36 times less risky than Gencor Industries. It trades about 0.28 of its potential returns per unit of risk. Gencor Industries is currently generating about 0.07 per unit of risk. If you would invest 228.00 in Data IO on April 26, 2025 and sell it today you would earn a total of 96.00 from holding Data IO or generate 42.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.39% |
Values | Daily Returns |
Data IO vs. Gencor Industries
Performance |
Timeline |
Data IO |
Gencor Industries |
Data IO and Gencor Industries Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Data IO and Gencor Industries
The main advantage of trading using opposite Data IO and Gencor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data IO position performs unexpectedly, Gencor Industries 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 Gencor Industries will offset losses from the drop in Gencor Industries' long position.Data IO vs. CSP Inc | Data IO vs. Deswell Industries | Data IO vs. Electro Sensors | Data IO vs. Frequency Electronics |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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