Correlation Between Genasys and AERWINS Technologies
Can any of the company-specific risk be diversified away by investing in both Genasys and AERWINS Technologies 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 Genasys and AERWINS Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genasys and AERWINS Technologies, you can compare the effects of market volatilities on Genasys and AERWINS Technologies 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 Genasys with a short position of AERWINS Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genasys and AERWINS Technologies.
Diversification Opportunities for Genasys and AERWINS Technologies
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Genasys and AERWINS is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Genasys and AERWINS Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AERWINS Technologies and Genasys 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 Genasys are associated (or correlated) with AERWINS Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AERWINS Technologies has no effect on the direction of Genasys i.e., Genasys and AERWINS Technologies go up and down completely randomly.
Pair Corralation between Genasys and AERWINS Technologies
Given the investment horizon of 90 days Genasys is expected to generate 13.82 times less return on investment than AERWINS Technologies. But when comparing it to its historical volatility, Genasys is 6.8 times less risky than AERWINS Technologies. It trades about 0.03 of its potential returns per unit of risk. AERWINS Technologies is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 15.00 in AERWINS Technologies on September 2, 2024 and sell it today you would lose (14.42) from holding AERWINS Technologies or give up 96.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 68.15% |
| Values | Daily Returns |
Genasys vs. AERWINS Technologies
Performance |
| Timeline |
| Genasys |
| AERWINS Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Genasys and AERWINS Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genasys and AERWINS Technologies
The main advantage of trading using opposite Genasys and AERWINS Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genasys position performs unexpectedly, AERWINS Technologies 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 AERWINS Technologies will offset losses from the drop in AERWINS Technologies' long position.The idea behind Genasys and AERWINS Technologies 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.| AERWINS Technologies vs. Radcom | AERWINS Technologies vs. FARO Technologies | AERWINS Technologies vs. ServiceNow | AERWINS Technologies vs. Shake Shack |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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