Correlation Between GEN Restaurant and Bassett Furniture
Can any of the company-specific risk be diversified away by investing in both GEN Restaurant and Bassett Furniture 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 GEN Restaurant and Bassett Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEN Restaurant Group, and Bassett Furniture Industries, you can compare the effects of market volatilities on GEN Restaurant and Bassett Furniture 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 GEN Restaurant with a short position of Bassett Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEN Restaurant and Bassett Furniture.
Diversification Opportunities for GEN Restaurant and Bassett Furniture
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GEN and Bassett is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding GEN Restaurant Group, and Bassett Furniture Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bassett Furniture and GEN Restaurant 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 GEN Restaurant Group, are associated (or correlated) with Bassett Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bassett Furniture has no effect on the direction of GEN Restaurant i.e., GEN Restaurant and Bassett Furniture go up and down completely randomly.
Pair Corralation between GEN Restaurant and Bassett Furniture
Given the investment horizon of 90 days GEN Restaurant Group, is expected to under-perform the Bassett Furniture. In addition to that, GEN Restaurant is 2.99 times more volatile than Bassett Furniture Industries. It trades about -0.04 of its total potential returns per unit of risk. Bassett Furniture Industries is currently generating about 0.21 per unit of volatility. If you would invest 1,392 in Bassett Furniture Industries on August 30, 2024 and sell it today you would earn a total of 116.00 from holding Bassett Furniture Industries or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GEN Restaurant Group, vs. Bassett Furniture Industries
Performance |
| Timeline |
| GEN Restaurant Group, |
| Bassett Furniture |
GEN Restaurant and Bassett Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEN Restaurant and Bassett Furniture
The main advantage of trading using opposite GEN Restaurant and Bassett Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEN Restaurant position performs unexpectedly, Bassett Furniture 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 Bassett Furniture will offset losses from the drop in Bassett Furniture's long position.| GEN Restaurant vs. Allient | GEN Restaurant vs. NioCorp Developments Ltd | GEN Restaurant vs. Nextplat Corp | GEN Restaurant vs. Asure Software |
| Bassett Furniture vs. Hooker Furniture | Bassett Furniture vs. Flexsteel Industries | Bassett Furniture vs. Haverty Furniture Companies | Bassett Furniture vs. La Z Boy Incorporated |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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