Correlation Between Favite and Genius Electronic
Can any of the company-specific risk be diversified away by investing in both Favite and Genius Electronic 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 Favite and Genius Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Favite Inc and Genius Electronic Optical, you can compare the effects of market volatilities on Favite and Genius Electronic 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 Favite with a short position of Genius Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Favite and Genius Electronic.
Diversification Opportunities for Favite and Genius Electronic
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Favite and Genius is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Favite Inc and Genius Electronic Optical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genius Electronic Optical and Favite 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 Favite Inc are associated (or correlated) with Genius Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genius Electronic Optical has no effect on the direction of Favite i.e., Favite and Genius Electronic go up and down completely randomly.
Pair Corralation between Favite and Genius Electronic
Assuming the 90 days trading horizon Favite Inc is expected to under-perform the Genius Electronic. In addition to that, Favite is 1.63 times more volatile than Genius Electronic Optical. It trades about -0.18 of its total potential returns per unit of risk. Genius Electronic Optical is currently generating about 0.0 per unit of volatility. If you would invest 45,350 in Genius Electronic Optical on August 28, 2024 and sell it today you would lose (200.00) from holding Genius Electronic Optical or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Favite Inc vs. Genius Electronic Optical
Performance |
| Timeline |
| Favite Inc |
| Genius Electronic Optical |
Favite and Genius Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Favite and Genius Electronic
The main advantage of trading using opposite Favite and Genius Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Favite position performs unexpectedly, Genius Electronic 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 Genius Electronic will offset losses from the drop in Genius Electronic's long position.| Favite vs. Genius Electronic Optical | Favite vs. United Renewable Energy | Favite vs. Hannstar Display Corp | Favite vs. Young Optics |
| Genius Electronic vs. LARGAN Precision Co | Genius Electronic vs. Catcher Technology Co | Genius Electronic vs. Unimicron Technology Corp | Genius Electronic vs. WIN Semiconductors |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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