Correlation Between Genesco and Silicon Motion
Can any of the company-specific risk be diversified away by investing in both Genesco and Silicon Motion 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 Genesco and Silicon Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genesco and Silicon Motion Technology, you can compare the effects of market volatilities on Genesco and Silicon Motion 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 Genesco with a short position of Silicon Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genesco and Silicon Motion.
Diversification Opportunities for Genesco and Silicon Motion
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Genesco and Silicon is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Genesco and Silicon Motion Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Motion Technology and Genesco 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 Genesco are associated (or correlated) with Silicon Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Motion Technology has no effect on the direction of Genesco i.e., Genesco and Silicon Motion go up and down completely randomly.
Pair Corralation between Genesco and Silicon Motion
Assuming the 90 days horizon Genesco is expected to generate 1.75 times more return on investment than Silicon Motion. However, Genesco is 1.75 times more volatile than Silicon Motion Technology. It trades about 0.03 of its potential returns per unit of risk. Silicon Motion Technology is currently generating about 0.01 per unit of risk. If you would invest 2,880 in Genesco on August 31, 2024 and sell it today you would earn a total of 380.00 from holding Genesco or generate 13.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genesco vs. Silicon Motion Technology
Performance |
| Timeline |
| Genesco |
| Silicon Motion Technology |
Genesco and Silicon Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genesco and Silicon Motion
The main advantage of trading using opposite Genesco and Silicon Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genesco position performs unexpectedly, Silicon Motion 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 Silicon Motion will offset losses from the drop in Silicon Motion's long position.| Genesco vs. LGI Homes | Genesco vs. American Homes 4 | Genesco vs. Dalata Hotel Group | Genesco vs. DFS Furniture PLC |
| Silicon Motion vs. Alfa Financial Software | Silicon Motion vs. Sanyo Chemical Industries | Silicon Motion vs. KINGBOARD CHEMICAL | Silicon Motion vs. Mitsui Chemicals |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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