Correlation Between GEN Restaurant and Cistera Networks
Can any of the company-specific risk be diversified away by investing in both GEN Restaurant and Cistera Networks 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 Cistera Networks 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 Cistera Networks, you can compare the effects of market volatilities on GEN Restaurant and Cistera Networks 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 Cistera Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEN Restaurant and Cistera Networks.
Diversification Opportunities for GEN Restaurant and Cistera Networks
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GEN and Cistera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GEN Restaurant Group, and Cistera Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cistera Networks 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 Cistera Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cistera Networks has no effect on the direction of GEN Restaurant i.e., GEN Restaurant and Cistera Networks go up and down completely randomly.
Pair Corralation between GEN Restaurant and Cistera Networks
Given the investment horizon of 90 days GEN Restaurant is expected to generate 1.5 times less return on investment than Cistera Networks. But when comparing it to its historical volatility, GEN Restaurant Group, is 1.28 times less risky than Cistera Networks. It trades about 0.05 of its potential returns per unit of risk. Cistera Networks is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.02 in Cistera Networks on September 14, 2024 and sell it today you would lose (0.01) from holding Cistera Networks or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 81.32% |
| Values | Daily Returns |
GEN Restaurant Group, vs. Cistera Networks
Performance |
| Timeline |
| GEN Restaurant Group, |
| Cistera Networks |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GEN Restaurant and Cistera Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEN Restaurant and Cistera Networks
The main advantage of trading using opposite GEN Restaurant and Cistera Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEN Restaurant position performs unexpectedly, Cistera Networks 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 Cistera Networks will offset losses from the drop in Cistera Networks' long position.The idea behind GEN Restaurant Group, and Cistera Networks pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cistera Networks vs. Waste Management | Cistera Networks vs. GEN Restaurant Group, | Cistera Networks vs. Shake Shack | Cistera Networks vs. US Global Investors |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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