Correlation Between Eternal Materials and Genesis Technology
Can any of the company-specific risk be diversified away by investing in both Eternal Materials and Genesis Technology 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 Eternal Materials and Genesis Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eternal Materials Co and Genesis Technology, you can compare the effects of market volatilities on Eternal Materials and Genesis Technology 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 Eternal Materials with a short position of Genesis Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eternal Materials and Genesis Technology.
Diversification Opportunities for Eternal Materials and Genesis Technology
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eternal and Genesis is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Eternal Materials Co and Genesis Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Technology and Eternal Materials 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 Eternal Materials Co are associated (or correlated) with Genesis Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Technology has no effect on the direction of Eternal Materials i.e., Eternal Materials and Genesis Technology go up and down completely randomly.
Pair Corralation between Eternal Materials and Genesis Technology
Assuming the 90 days trading horizon Eternal Materials Co is expected to under-perform the Genesis Technology. But the stock apears to be less risky and, when comparing its historical volatility, Eternal Materials Co is 1.43 times less risky than Genesis Technology. The stock trades about 0.0 of its potential returns per unit of risk. The Genesis Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,200 in Genesis Technology on September 2, 2024 and sell it today you would earn a total of 1,230 from holding Genesis Technology or generate 23.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eternal Materials Co vs. Genesis Technology
Performance |
| Timeline |
| Eternal Materials |
| Genesis Technology |
Eternal Materials and Genesis Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eternal Materials and Genesis Technology
The main advantage of trading using opposite Eternal Materials and Genesis Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eternal Materials position performs unexpectedly, Genesis Technology 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 Genesis Technology will offset losses from the drop in Genesis Technology's long position.| Eternal Materials vs. Basso Industry Corp | Eternal Materials vs. Chung Hsin Electric Machinery | Eternal Materials vs. TYC Brother Industrial | Eternal Materials vs. TECO Electric Machinery |
| Genesis Technology vs. Acer E Enabling Service | Genesis Technology vs. Green World Fintech | Genesis Technology vs. Syscom Computer Engineering |
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 the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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