Correlation Between Envela Corp and Genuine Parts

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

Diversification Opportunities for Envela Corp and Genuine Parts

0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Envela and Genuine is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Envela Corp and Genuine Parts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genuine Parts and Envela Corp 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 Envela Corp 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 Envela Corp i.e., Envela Corp and Genuine Parts go up and down completely randomly.

Pair Corralation between Envela Corp and Genuine Parts

Considering the 90-day investment horizon Envela Corp is expected to generate 3.03 times more return on investment than Genuine Parts. However, Envela Corp is 3.03 times more volatile than Genuine Parts. It trades about 0.25 of its potential returns per unit of risk. Genuine Parts is currently generating about -0.03 per unit of risk. If you would invest  530.00  in Envela Corp on April 1, 2022 and sell it today you would earn a total of  154.00  from holding Envela Corp or generate 29.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Envela Corp  vs.  Genuine Parts

 Performance (%) 
      Timeline 
Envela Corp 
Envela Performance
13 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Envela Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating essential indicators, Envela Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Envela Price Channel

Genuine Parts 
Genuine Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Genuine Parts are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Genuine Parts may actually be approaching a critical reversion point that can send shares even higher in July 2022.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0264
Payout Ratio
0.47
Last Split Factor
3:2
Forward Annual Dividend Rate
3.58
Dividend Date
2022-07-01
Ex Dividend Date
2022-06-02
Last Split Date
1997-04-15

Genuine Price Channel

Envela Corp and Genuine Parts Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Envela Corp and Genuine Parts

The main advantage of trading using opposite Envela Corp and Genuine Parts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Envela Corp 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 Envela Corp and Genuine Parts 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.
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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