Correlation Between Generac Holdings and KUKA Aktiengesellscha

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

By analyzing existing cross correlation between Generac Holdings and KUKA Aktiengesellschaft, you can compare the effects of market volatilities on Generac Holdings and KUKA Aktiengesellscha 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 Generac Holdings with a short position of KUKA Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generac Holdings and KUKA Aktiengesellscha.

Diversification Opportunities for Generac Holdings and KUKA Aktiengesellscha

0.0

Correlation Coefficient

Generac Holdings  KUKA Aktiengesellscha

Pay attention - limited upside

The 3 months correlation between Generac and KUKA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Generac Holdings and KUKA Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KUKA Aktiengesellschaft and Generac Holdings 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 Generac Holdings are associated (or correlated) with KUKA Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KUKA Aktiengesellschaft has no effect on the direction of Generac Holdings i.e., Generac Holdings and KUKA Aktiengesellscha go up and down completely randomly.

Pair Corralation between Generac Holdings and KUKA Aktiengesellscha

If you would invest  7,796  in KUKA Aktiengesellschaft on September 28, 2024 and sell it today you would earn a total of  0.00  from holding KUKA Aktiengesellschaft or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Generac Holdings  vs.  KUKA Aktiengesellschaft

Generac Holdings

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Generac Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Generac Holdings is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

KUKA Aktiengesellschaft

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KUKA Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, KUKA Aktiengesellscha is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Generac Holdings and KUKA Aktiengesellscha

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

The idea behind Generac Holdings and KUKA Aktiengesellschaft 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.