Correlation Between Gencor Industries and Data IO

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Can any of the company-specific risk be diversified away by investing in both Gencor Industries and Data IO 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 Gencor Industries and Data IO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gencor Industries and Data IO, you can compare the effects of market volatilities on Gencor Industries and Data IO 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 Gencor Industries with a short position of Data IO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gencor Industries and Data IO.

Diversification Opportunities for Gencor Industries and Data IO

0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Gencor and Data is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Gencor Industries and Data IO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data IO and Gencor Industries 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 Gencor Industries are associated (or correlated) with Data IO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data IO has no effect on the direction of Gencor Industries i.e., Gencor Industries and Data IO go up and down completely randomly.

Pair Corralation between Gencor Industries and Data IO

Given the investment horizon of 90 days Gencor Industries is expected to generate 1.7 times less return on investment than Data IO. In addition to that, Gencor Industries is 1.33 times more volatile than Data IO. It trades about 0.13 of its total potential returns per unit of risk. Data IO is currently generating about 0.3 per unit of volatility. If you would invest  208.00  in Data IO on April 23, 2025 and sell it today you would earn a total of  110.00  from holding Data IO or generate 52.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Gencor Industries  vs.  Data IO

 Performance 
       Timeline  
Gencor Industries 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Gencor Industries are ranked lower than 10 (%) 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.
Data IO 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Data IO are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Data IO displayed solid returns over the last few months and may actually be approaching a breakup point.

Gencor Industries and Data IO Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gencor Industries and Data IO

The main advantage of trading using opposite Gencor Industries and Data IO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gencor Industries position performs unexpectedly, Data IO 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 Data IO will offset losses from the drop in Data IO's long position.
The idea behind Gencor Industries and Data IO 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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