Correlation Between Alfa Financial and Genesco
Can any of the company-specific risk be diversified away by investing in both Alfa Financial and Genesco 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 Alfa Financial and Genesco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and Genesco, you can compare the effects of market volatilities on Alfa Financial and Genesco 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 Alfa Financial with a short position of Genesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and Genesco.
Diversification Opportunities for Alfa Financial and Genesco
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alfa and Genesco is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and Genesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesco and Alfa Financial 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 Alfa Financial Software are associated (or correlated) with Genesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesco has no effect on the direction of Alfa Financial i.e., Alfa Financial and Genesco go up and down completely randomly.
Pair Corralation between Alfa Financial and Genesco
Assuming the 90 days trading horizon Alfa Financial is expected to generate 4.66 times less return on investment than Genesco. But when comparing it to its historical volatility, Alfa Financial Software is 1.82 times less risky than Genesco. It trades about 0.16 of its potential returns per unit of risk. Genesco is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 2,840 in Genesco on September 14, 2024 and sell it today you would earn a total of 1,240 from holding Genesco or generate 43.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. Genesco
Performance |
| Timeline |
| Alfa Financial Software |
| Genesco |
Alfa Financial and Genesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and Genesco
The main advantage of trading using opposite Alfa Financial and Genesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial position performs unexpectedly, Genesco 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 Genesco will offset losses from the drop in Genesco's long position.| Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc |
| Genesco vs. ASURE SOFTWARE | Genesco vs. Platinum Investment Management | Genesco vs. VITEC SOFTWARE GROUP | Genesco vs. Alfa Financial Software |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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