Correlation Between Spectrum Technology and Genuine Parts

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

By analyzing existing cross correlation between Spectrum Technology and Genuine Parts Co, you can compare the effects of market volatilities on Spectrum Technology and Genuine Parts 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 Spectrum Technology with a short position of Genuine Parts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spectrum Technology and Genuine Parts.

Diversification Opportunities for Spectrum Technology and Genuine Parts

-0.07

Correlation Coefficient

Spectrum Technology  Genuine Parts

Good diversification

The 3 months correlation between Spectrum and Genuine is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Spectrum Technology and Genuine Parts Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genuine Parts and Spectrum Technology 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 Spectrum Technology are associated (or correlated) with Genuine Parts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genuine Parts has no effect on the direction of Spectrum Technology i.e., Spectrum Technology and Genuine Parts go up and down completely randomly.

Pair Corralation between Spectrum Technology and Genuine Parts

Given the investment horizon of 90 days Spectrum Technology is expected to generate 84.67 times more return on investment than Genuine Parts. However, Spectrum Technology is 84.67 times more volatile than Genuine Parts Co. It trades about 0.13 of its potential returns per unit of risk. Genuine Parts Co is currently generating about 0.11 per unit of risk. If you would invest  0.00  in Spectrum Technology on May 27, 2025 and sell it today you would earn a total of  0.00  from holding Spectrum Technology or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Spectrum Technology  vs.  Genuine Parts Co

Spectrum Technology

Risk-Adjusted Performance

Weakest

Compared to the overall equity markets, risk-adjusted returns on investments in Spectrum Technology are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Spectrum Technology exhibited solid returns over the last few months and may actually be approaching a breakup point.

Genuine Parts

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Genuine Parts Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Genuine Parts may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Spectrum Technology and Genuine Parts

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

The idea behind Spectrum Technology and Genuine Parts Co 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.