Correlation Between Genesis Technology and Ares International
Can any of the company-specific risk be diversified away by investing in both Genesis Technology and Ares International 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 Genesis Technology and Ares International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genesis Technology and Ares International Corp, you can compare the effects of market volatilities on Genesis Technology and Ares International 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 Genesis Technology with a short position of Ares International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genesis Technology and Ares International.
Diversification Opportunities for Genesis Technology and Ares International
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Genesis and Ares is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Genesis Technology and Ares International Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares International Corp and Genesis Technology 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 Genesis Technology are associated (or correlated) with Ares International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares International Corp has no effect on the direction of Genesis Technology i.e., Genesis Technology and Ares International go up and down completely randomly.
Pair Corralation between Genesis Technology and Ares International
Assuming the 90 days trading horizon Genesis Technology is expected to generate 0.25 times more return on investment than Ares International. However, Genesis Technology is 4.05 times less risky than Ares International. It trades about -0.43 of its potential returns per unit of risk. Ares International Corp is currently generating about -0.22 per unit of risk. If you would invest 6,720 in Genesis Technology on August 24, 2024 and sell it today you would lose (150.00) from holding Genesis Technology or give up 2.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genesis Technology vs. Ares International Corp
Performance |
| Timeline |
| Genesis Technology |
| Ares International Corp |
Genesis Technology and Ares International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genesis Technology and Ares International
The main advantage of trading using opposite Genesis Technology and Ares International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genesis Technology position performs unexpectedly, Ares International 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 Ares International will offset losses from the drop in Ares International's long position.| Genesis Technology vs. Simple Mart Retail | Genesis Technology vs. Trade Van Information Services | Genesis Technology vs. Chien Kuo Construction | Genesis Technology vs. Dimerco Data System |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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