Correlation Between Gentex and ContraFect

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

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

Diversification Opportunities for Gentex and ContraFect

0.61

Correlation Coefficient

Gentex  ContraFect

Poor diversification

The 3 months correlation between Gentex and ContraFect is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and ContraFect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ContraFect 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 ContraFect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ContraFect has no effect on the direction of Gentex i.e., Gentex and ContraFect go up and down completely randomly.

Pair Corralation between Gentex and ContraFect

Given the investment horizon of 90 days Gentex is expected to generate 0.06 times more return on investment than ContraFect. However, Gentex is 16.07 times less risky than ContraFect. It trades about -0.13 of its potential returns per unit of risk. ContraFect is currently generating about -0.21 per unit of risk. If you would invest  2,848  in Gentex on July 7, 2025 and sell it today you would lose (90.00) from holding Gentex or give up 3.16% of portfolio value over 90 days.

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

Gentex  vs.  ContraFect

Gentex

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gentex are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Gentex showed solid returns over the last few months and may actually be approaching a breakup point.

ContraFect

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in ContraFect are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, ContraFect reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gentex and ContraFect

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

The idea behind Gentex and ContraFect 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.