Correlation Between Genesis Land and Mainstreet Equity
Can any of the company-specific risk be diversified away by investing in both Genesis Land and Mainstreet Equity 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 Land and Mainstreet Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genesis Land Development and Mainstreet Equity Corp, you can compare the effects of market volatilities on Genesis Land and Mainstreet Equity 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 Land with a short position of Mainstreet Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genesis Land and Mainstreet Equity.
Diversification Opportunities for Genesis Land and Mainstreet Equity
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Genesis and Mainstreet is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Genesis Land Development and Mainstreet Equity Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstreet Equity Corp and Genesis Land 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 Land Development are associated (or correlated) with Mainstreet Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstreet Equity Corp has no effect on the direction of Genesis Land i.e., Genesis Land and Mainstreet Equity go up and down completely randomly.
Pair Corralation between Genesis Land and Mainstreet Equity
Assuming the 90 days trading horizon Genesis Land Development is expected to generate 2.04 times more return on investment than Mainstreet Equity. However, Genesis Land is 2.04 times more volatile than Mainstreet Equity Corp. It trades about -0.07 of its potential returns per unit of risk. Mainstreet Equity Corp is currently generating about -0.15 per unit of risk. If you would invest 400.00 in Genesis Land Development on August 28, 2024 and sell it today you would lose (14.00) from holding Genesis Land Development or give up 3.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genesis Land Development vs. Mainstreet Equity Corp
Performance |
| Timeline |
| Genesis Land Development |
| Mainstreet Equity Corp |
Genesis Land and Mainstreet Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genesis Land and Mainstreet Equity
The main advantage of trading using opposite Genesis Land and Mainstreet Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genesis Land position performs unexpectedly, Mainstreet Equity 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 Mainstreet Equity will offset losses from the drop in Mainstreet Equity's long position.| Genesis Land vs. Melcor Developments | Genesis Land vs. Mainstreet Equity Corp | Genesis Land vs. Madison Pacific Properties | Genesis Land vs. Morguard |
| Mainstreet Equity vs. Morguard | Mainstreet Equity vs. Melcor Developments | Mainstreet Equity vs. Boardwalk Real Estate | Mainstreet Equity vs. Genesis Land Development |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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