Correlation Between Novanta and Genasys
Can any of the company-specific risk be diversified away by investing in both Novanta and Genasys 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 Novanta and Genasys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novanta and Genasys, you can compare the effects of market volatilities on Novanta and Genasys 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 Novanta with a short position of Genasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novanta and Genasys.
Diversification Opportunities for Novanta and Genasys
Very good diversification
The 3 months correlation between Novanta and Genasys is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Novanta and Genasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genasys and Novanta 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 Novanta are associated (or correlated) with Genasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genasys has no effect on the direction of Novanta i.e., Novanta and Genasys go up and down completely randomly.
Pair Corralation between Novanta and Genasys
Given the investment horizon of 90 days Novanta is expected to generate 1.07 times more return on investment than Genasys. However, Novanta is 1.07 times more volatile than Genasys. It trades about -0.01 of its potential returns per unit of risk. Genasys is currently generating about -0.02 per unit of risk. If you would invest 17,270 in Novanta on August 25, 2024 and sell it today you would lose (291.00) from holding Novanta or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novanta vs. Genasys
Performance |
| Timeline |
| Novanta |
| Genasys |
Novanta and Genasys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novanta and Genasys
The main advantage of trading using opposite Novanta and Genasys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novanta position performs unexpectedly, Genasys 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 Genasys will offset losses from the drop in Genasys' long position.| Novanta vs. Mesa Laboratories | Novanta vs. Itron Inc | Novanta vs. Fortive Corp | Novanta vs. Vishay Precision Group |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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