Correlation Between Tenneco Automotive and General American

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Tenneco Automotive and General American 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 Tenneco Automotive and General American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tenneco Automotive and General American Investors, you can compare the effects of market volatilities on Tenneco Automotive and General American 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 Tenneco Automotive with a short position of General American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenneco Automotive and General American.

Diversification Opportunities for Tenneco Automotive and General American

0.49
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Tenneco and General is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Tenneco Automotive and General American Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General American Inv and Tenneco Automotive 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 Tenneco Automotive are associated (or correlated) with General American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General American Inv has no effect on the direction of Tenneco Automotive i.e., Tenneco Automotive and General American go up and down completely randomly.

Pair Corralation between Tenneco Automotive and General American

Considering the 90-day investment horizon Tenneco Automotive is expected to generate 4.59 times more return on investment than General American. However, Tenneco Automotive is 4.59 times more volatile than General American Investors. It trades about 0.05 of its potential returns per unit of risk. General American Investors is currently generating about 0.01 per unit of risk. If you would invest  833.00  in Tenneco Automotive on June 26, 2022 and sell it today you would earn a total of  935.00  from holding Tenneco Automotive or generate 112.24% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Tenneco Automotive  vs.  General American Investors

 Performance (%) 
       Timeline  
Tenneco Automotive 
Tenneco Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Tenneco Automotive are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, Tenneco Automotive is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Tenneco Price Channel

General American Inv 
General Performance
0 of 100
Over the last 90 days General American Investors has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, General American is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

General Price Channel

Tenneco Automotive and General American Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tenneco Automotive and General American

The main advantage of trading using opposite Tenneco Automotive and General American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenneco Automotive position performs unexpectedly, General American 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 General American will offset losses from the drop in General American's long position.
Tenneco Automotive vs. Denso Corp
The idea behind Tenneco Automotive and General American Investors 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.
General American vs. American Growth
General American vs. Invesco Focused Discovery
General American vs. Etfmg Breakwave Sea
General American vs. FT Tcw ESG
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 ETF Directory module to find actively traded Exchange Traded Funds (ETF) from around the world.

Other Complementary Tools

Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Go
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go