Correlation Between Genomtec and E Xim
Can any of the company-specific risk be diversified away by investing in both Genomtec and E Xim 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 Genomtec and E Xim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genomtec SA and E Xim IT, you can compare the effects of market volatilities on Genomtec and E Xim 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 Genomtec with a short position of E Xim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genomtec and E Xim.
Diversification Opportunities for Genomtec and E Xim
Very good diversification
The 3 months correlation between Genomtec and EXM is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Genomtec SA and E Xim IT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Xim IT and Genomtec 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 Genomtec SA are associated (or correlated) with E Xim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Xim IT has no effect on the direction of Genomtec i.e., Genomtec and E Xim go up and down completely randomly.
Pair Corralation between Genomtec and E Xim
Assuming the 90 days trading horizon Genomtec SA is expected to under-perform the E Xim. But the stock apears to be less risky and, when comparing its historical volatility, Genomtec SA is 1.42 times less risky than E Xim. The stock trades about -0.33 of its potential returns per unit of risk. The E Xim IT is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 14,500 in E Xim IT on September 5, 2024 and sell it today you would earn a total of 2,500 from holding E Xim IT or generate 17.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 54.55% |
| Values | Daily Returns |
Genomtec SA vs. E Xim IT
Performance |
| Timeline |
| Genomtec SA |
| E Xim IT |
Genomtec and E Xim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genomtec and E Xim
The main advantage of trading using opposite Genomtec and E Xim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genomtec position performs unexpectedly, E Xim 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 E Xim will offset losses from the drop in E Xim's long position.| Genomtec vs. Banco Santander SA | Genomtec vs. UniCredit SpA | Genomtec vs. CEZ as | Genomtec vs. Polski Koncern Naftowy |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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