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

0.67

Correlation Coefficient

Data IO  Gencor Industries

Poor diversification

The 3 months correlation between Data and Gencor is 0.67. 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 1.41 times less return on investment than Gencor Industries. But when comparing it to its historical volatility, Data IO is 1.16 times less risky than Gencor Industries. It trades about 0.07 of its potential returns per unit of risk. Gencor Industries is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,412  in Gencor Industries on May 25, 2025 and sell it today you would earn a total of  212.00  from holding Gencor Industries or generate 15.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Data IO  vs.  Gencor Industries

Data IO

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Data IO are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Data IO may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Gencor Industries

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Gencor Industries are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Gencor Industries exhibited solid returns over the last few months and may actually be approaching a breakup point.

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.

The idea behind Data IO and Gencor Industries 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.