Correlation Between Gentex and Quantumscape Corp

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

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

Diversification Opportunities for Gentex and Quantumscape Corp

0.69

Correlation Coefficient

Gentex  Quantumscape Corp

Poor diversification

The 3 months correlation between Gentex and Quantumscape is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and Quantumscape Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantumscape Corp 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 Quantumscape Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantumscape Corp has no effect on the direction of Gentex i.e., Gentex and Quantumscape Corp go up and down completely randomly.

Pair Corralation between Gentex and Quantumscape Corp

Given the investment horizon of 90 days Gentex is expected to under-perform the Quantumscape Corp. But the stock apears to be less risky and, when comparing its historical volatility, Gentex is 2.36 times less risky than Quantumscape Corp. The stock trades about -0.11 of its potential returns per unit of risk. The Quantumscape Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  457.00  in Quantumscape Corp on March 26, 2025 and sell it today you would lose (28.00) from holding Quantumscape Corp or give up 6.13% of portfolio value over 90 days.

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

Gentex  vs.  Quantumscape Corp

Gentex

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gentex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in July 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Quantumscape Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quantumscape Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Quantumscape Corp is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Gentex and Quantumscape Corp

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

The idea behind Gentex and Quantumscape Corp 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.