Correlation Between GEN Restaurant and Western Digital
Can any of the company-specific risk be diversified away by investing in both GEN Restaurant and Western Digital 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 Western Digital 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 Western Digital, you can compare the effects of market volatilities on GEN Restaurant and Western Digital 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 Western Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEN Restaurant and Western Digital.
Diversification Opportunities for GEN Restaurant and Western Digital
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between GEN and Western is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding GEN Restaurant Group, and Western Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Digital 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 Western Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Digital has no effect on the direction of GEN Restaurant i.e., GEN Restaurant and Western Digital go up and down completely randomly.
Pair Corralation between GEN Restaurant and Western Digital
Given the investment horizon of 90 days GEN Restaurant Group, is expected to under-perform the Western Digital. In addition to that, GEN Restaurant is 1.89 times more volatile than Western Digital. It trades about -0.07 of its total potential returns per unit of risk. Western Digital is currently generating about 0.09 per unit of volatility. If you would invest 6,971 in Western Digital on August 29, 2024 and sell it today you would earn a total of 331.00 from holding Western Digital or generate 4.75% 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. Western Digital
Performance |
| Timeline |
| GEN Restaurant Group, |
| Western Digital |
GEN Restaurant and Western Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEN Restaurant and Western Digital
The main advantage of trading using opposite GEN Restaurant and Western Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEN Restaurant position performs unexpectedly, Western Digital 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 Western Digital will offset losses from the drop in Western Digital's long position.| GEN Restaurant vs. Cebu Air ADR | GEN Restaurant vs. ArcelorMittal SA ADR | GEN Restaurant vs. Grupo Simec SAB | GEN Restaurant vs. Corporacion America Airports |
| Western Digital vs. D Wave Quantum | Western Digital vs. Rigetti Computing | Western Digital vs. Cricut Inc | Western Digital vs. Quantum Computing |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |