Correlation Between Genius Electronic and United Renewable
Can any of the company-specific risk be diversified away by investing in both Genius Electronic and United Renewable 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 Genius Electronic and United Renewable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genius Electronic Optical and United Renewable Energy, you can compare the effects of market volatilities on Genius Electronic and United Renewable 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 Genius Electronic with a short position of United Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genius Electronic and United Renewable.
Diversification Opportunities for Genius Electronic and United Renewable
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Genius and United is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Genius Electronic Optical and United Renewable Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Renewable Energy and Genius Electronic 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 Genius Electronic Optical are associated (or correlated) with United Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Renewable Energy has no effect on the direction of Genius Electronic i.e., Genius Electronic and United Renewable go up and down completely randomly.
Pair Corralation between Genius Electronic and United Renewable
Assuming the 90 days trading horizon Genius Electronic is expected to generate 1.16 times less return on investment than United Renewable. But when comparing it to its historical volatility, Genius Electronic Optical is 1.31 times less risky than United Renewable. It trades about 0.31 of its potential returns per unit of risk. United Renewable Energy is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 955.00 in United Renewable Energy on November 28, 2024 and sell it today you would earn a total of 70.00 from holding United Renewable Energy or generate 7.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genius Electronic Optical vs. United Renewable Energy
Performance |
| Timeline |
| Genius Electronic Optical |
| United Renewable Energy |
Genius Electronic and United Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genius Electronic and United Renewable
The main advantage of trading using opposite Genius Electronic and United Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genius Electronic position performs unexpectedly, United Renewable 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 United Renewable will offset losses from the drop in United Renewable's long position.| Genius Electronic vs. LARGAN Precision Co | Genius Electronic vs. Catcher Technology Co | Genius Electronic vs. Unimicron Technology Corp | Genius Electronic vs. WIN Semiconductors |
| United Renewable vs. Motech Industries Co | United Renewable vs. Innolux Corp | United Renewable vs. Gigastorage Corp | United Renewable vs. Darwin Precisions Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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