Correlation Between VF and Genuine Parts

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

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

Diversification Opportunities for VF and Genuine Parts

0.33

Correlation Coefficient

VF  Genuine Parts

Weak diversification

The 3 months correlation between VF and Genuine is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding VF Corp. and Genuine Parts Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genuine Parts and VF 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 VF Corporation 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 VF i.e., VF and Genuine Parts go up and down completely randomly.

Pair Corralation between VF and Genuine Parts

Considering the 90-day investment horizon VF is expected to generate 1.72 times less return on investment than Genuine Parts. In addition to that, VF is 2.42 times more volatile than Genuine Parts Co. It trades about 0.02 of its total potential returns per unit of risk. Genuine Parts Co is currently generating about 0.08 per unit of volatility. If you would invest  11,931  in Genuine Parts Co on May 2, 2025 and sell it today you would earn a total of  957.00  from holding Genuine Parts Co or generate 8.02% return on investment over 90 days.

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

VF Corp.  vs.  Genuine Parts Co

VF Corporation

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VF Corporation are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, VF is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Genuine Parts

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Genuine Parts Co are ranked lower than 6 (%) 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 August 2025.

Pair Trading with VF and Genuine Parts

The main advantage of trading using opposite VF and Genuine Parts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VF 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 VF Corporation 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.