Correlation Between Genesis Land and Madison Pacific
Can any of the company-specific risk be diversified away by investing in both Genesis Land and Madison Pacific 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 Madison Pacific 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 Madison Pacific Properties, you can compare the effects of market volatilities on Genesis Land and Madison Pacific 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 Madison Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genesis Land and Madison Pacific.
Diversification Opportunities for Genesis Land and Madison Pacific
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Genesis and Madison is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Genesis Land Development and Madison Pacific Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison Pacific Prop 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 Madison Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison Pacific Prop has no effect on the direction of Genesis Land i.e., Genesis Land and Madison Pacific go up and down completely randomly.
Pair Corralation between Genesis Land and Madison Pacific
Assuming the 90 days trading horizon Genesis Land Development is expected to generate 2.07 times more return on investment than Madison Pacific. However, Genesis Land is 2.07 times more volatile than Madison Pacific Properties. It trades about -0.05 of its potential returns per unit of risk. Madison Pacific Properties is currently generating about -0.41 per unit of risk. If you would invest 398.00 in Genesis Land Development on August 30, 2024 and sell it today you would lose (13.00) from holding Genesis Land Development or give up 3.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genesis Land Development vs. Madison Pacific Properties
Performance |
| Timeline |
| Genesis Land Development |
| Madison Pacific Prop |
Genesis Land and Madison Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genesis Land and Madison Pacific
The main advantage of trading using opposite Genesis Land and Madison Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genesis Land position performs unexpectedly, Madison Pacific 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 Madison Pacific will offset losses from the drop in Madison Pacific's long position.| Genesis Land vs. Melcor Developments | Genesis Land vs. Mainstreet Equity Corp | Genesis Land vs. Madison Pacific Properties | Genesis Land vs. Morguard |
| Madison Pacific vs. Melcor Developments | Madison Pacific vs. Wall Financial | Madison Pacific vs. Genesis Land Development | Madison Pacific vs. Mainstreet Equity 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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