Correlation Between GEN Restaurant and Noble Plc
Can any of the company-specific risk be diversified away by investing in both GEN Restaurant and Noble Plc 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 Noble Plc 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 Noble plc, you can compare the effects of market volatilities on GEN Restaurant and Noble Plc 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 Noble Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEN Restaurant and Noble Plc.
Diversification Opportunities for GEN Restaurant and Noble Plc
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between GEN and Noble is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding GEN Restaurant Group, and Noble plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noble plc 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 Noble Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noble plc has no effect on the direction of GEN Restaurant i.e., GEN Restaurant and Noble Plc go up and down completely randomly.
Pair Corralation between GEN Restaurant and Noble Plc
Given the investment horizon of 90 days GEN Restaurant Group, is expected to generate 1.52 times more return on investment than Noble Plc. However, GEN Restaurant is 1.52 times more volatile than Noble plc. It trades about -0.04 of its potential returns per unit of risk. Noble plc is currently generating about -0.07 per unit of risk. If you would invest 1,090 in GEN Restaurant Group, on August 30, 2024 and sell it today you would lose (268.00) from holding GEN Restaurant Group, or give up 24.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GEN Restaurant Group, vs. Noble plc
Performance |
| Timeline |
| GEN Restaurant Group, |
| Noble plc |
GEN Restaurant and Noble Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEN Restaurant and Noble Plc
The main advantage of trading using opposite GEN Restaurant and Noble Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEN Restaurant position performs unexpectedly, Noble Plc 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 Noble Plc will offset losses from the drop in Noble Plc's long position.| GEN Restaurant vs. Allient | GEN Restaurant vs. NioCorp Developments Ltd | GEN Restaurant vs. Nextplat Corp | GEN Restaurant vs. Asure Software |
| Noble Plc vs. Seadrill Limited | Noble Plc vs. Borr Drilling | Noble Plc vs. Patterson UTI Energy | Noble Plc vs. Transocean |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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