Correlation Between Genuine Parts and Envela Corp

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

Diversification Opportunities for Genuine Parts and Envela Corp

0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Genuine and Envela is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Genuine Parts and Envela Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Envela Corp and Genuine Parts 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 Genuine Parts are associated (or correlated) with Envela Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Envela Corp has no effect on the direction of Genuine Parts i.e., Genuine Parts and Envela Corp go up and down completely randomly.

Pair Corralation between Genuine Parts and Envela Corp

Considering the 90-day investment horizon Genuine Parts is expected to under-perform the Envela Corp. But the stock apears to be less risky and, when comparing its historical volatility, Genuine Parts is 3.1 times less risky than Envela Corp. The stock trades about -0.03 of its potential returns per unit of risk. The Envela Corp is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  530.00  in Envela Corp on April 1, 2022 and sell it today you would earn a total of  151.00  from holding Envela Corp or generate 28.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.45%
ValuesDaily Returns

Genuine Parts  vs.  Envela Corp

 Performance (%) 
      Timeline 
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 
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 and Envela Corp Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Genuine Parts and Envela Corp

The main advantage of trading using opposite Genuine Parts and Envela Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genuine Parts position performs unexpectedly, Envela 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 Envela Corp will offset losses from the drop in Envela Corp's long position.
The idea behind Genuine Parts and Envela 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.
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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