Correlation Between Nextmart and Genesis Electronics
Can any of the company-specific risk be diversified away by investing in both Nextmart and Genesis Electronics 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 Nextmart and Genesis Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextmart and Genesis Electronics Group, you can compare the effects of market volatilities on Nextmart and Genesis Electronics 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 Nextmart with a short position of Genesis Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextmart and Genesis Electronics.
Diversification Opportunities for Nextmart and Genesis Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nextmart and Genesis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nextmart and Genesis Electronics Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Electronics and Nextmart 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 Nextmart are associated (or correlated) with Genesis Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Electronics has no effect on the direction of Nextmart i.e., Nextmart and Genesis Electronics go up and down completely randomly.
Pair Corralation between Nextmart and Genesis Electronics
Given the investment horizon of 90 days Nextmart is expected to generate 4.03 times more return on investment than Genesis Electronics. However, Nextmart is 4.03 times more volatile than Genesis Electronics Group. It trades about 0.11 of its potential returns per unit of risk. Genesis Electronics Group is currently generating about 0.0 per unit of risk. If you would invest 0.27 in Nextmart on November 5, 2024 and sell it today you would lose (0.21) from holding Nextmart or give up 77.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.97% |
| Values | Daily Returns |
Nextmart vs. Genesis Electronics Group
Performance |
| Timeline |
| Nextmart |
| Genesis Electronics |
Nextmart and Genesis Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextmart and Genesis Electronics
The main advantage of trading using opposite Nextmart and Genesis Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextmart position performs unexpectedly, Genesis Electronics 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 Genesis Electronics will offset losses from the drop in Genesis Electronics' long position.| Nextmart vs. Genesis Electronics Group | Nextmart vs. Industrial Nanotech | Nextmart vs. Intl Star | Nextmart vs. HeadsUp Entertainment International |
| Genesis Electronics vs. Volkswagen AG | Genesis Electronics vs. Volcon Inc | Genesis Electronics vs. Volkswagen AG Pref | Genesis Electronics vs. Polestar Automotive Holding |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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