Correlation Between Reitmans (Canada) and Genesco
Can any of the company-specific risk be diversified away by investing in both Reitmans (Canada) and Genesco 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 Reitmans (Canada) and Genesco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reitmans Limited and Genesco, you can compare the effects of market volatilities on Reitmans (Canada) and Genesco 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 Reitmans (Canada) with a short position of Genesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reitmans (Canada) and Genesco.
Diversification Opportunities for Reitmans (Canada) and Genesco
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Reitmans and Genesco is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Reitmans Limited and Genesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesco and Reitmans (Canada) 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 Reitmans Limited are associated (or correlated) with Genesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesco has no effect on the direction of Reitmans (Canada) i.e., Reitmans (Canada) and Genesco go up and down completely randomly.
Pair Corralation between Reitmans (Canada) and Genesco
Assuming the 90 days horizon Reitmans Limited is expected to generate 0.59 times more return on investment than Genesco. However, Reitmans Limited is 1.7 times less risky than Genesco. It trades about -0.04 of its potential returns per unit of risk. Genesco is currently generating about -0.05 per unit of risk. If you would invest 192.00 in Reitmans Limited on January 14, 2025 and sell it today you would lose (40.00) from holding Reitmans Limited or give up 20.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.21% |
| Values | Daily Returns |
Reitmans Limited vs. Genesco
Performance |
| Timeline |
| Reitmans (Canada) |
| Genesco |
Reitmans (Canada) and Genesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reitmans (Canada) and Genesco
The main advantage of trading using opposite Reitmans (Canada) and Genesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reitmans (Canada) position performs unexpectedly, Genesco 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 Genesco will offset losses from the drop in Genesco's long position.| Reitmans (Canada) vs. NEXT plc | Reitmans (Canada) vs. Reitmans Limited | Reitmans (Canada) vs. Lulus Fashion Lounge | Reitmans (Canada) vs. Duluth Holdings |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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