Correlation Between Genasys and Cepton
Can any of the company-specific risk be diversified away by investing in both Genasys and Cepton 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 Cepton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genasys and Cepton Inc, you can compare the effects of market volatilities on Genasys and Cepton 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 Cepton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genasys and Cepton.
Diversification Opportunities for Genasys and Cepton
Poor diversification
The 3 months correlation between Genasys and Cepton is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Genasys and Cepton Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cepton Inc 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 Cepton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cepton Inc has no effect on the direction of Genasys i.e., Genasys and Cepton go up and down completely randomly.
Pair Corralation between Genasys and Cepton
Given the investment horizon of 90 days Genasys is expected to generate 0.31 times more return on investment than Cepton. However, Genasys is 3.21 times less risky than Cepton. It trades about 0.19 of its potential returns per unit of risk. Cepton Inc is currently generating about -0.37 per unit of risk. If you would invest 272.00 in Genasys on November 3, 2024 and sell it today you would earn a total of 31.00 from holding Genasys or generate 11.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 20.0% |
| Values | Daily Returns |
Genasys vs. Cepton Inc
Performance |
| Timeline |
| Genasys |
| Cepton Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Genasys and Cepton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genasys and Cepton
The main advantage of trading using opposite Genasys and Cepton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genasys position performs unexpectedly, Cepton 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 Cepton will offset losses from the drop in Cepton's long position.The idea behind Genasys and Cepton Inc 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.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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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