Correlation Between Text SA and Genomtec
Can any of the company-specific risk be diversified away by investing in both Text SA and Genomtec 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 Text SA and Genomtec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Text SA and Genomtec SA, you can compare the effects of market volatilities on Text SA and Genomtec 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 Text SA with a short position of Genomtec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Text SA and Genomtec.
Diversification Opportunities for Text SA and Genomtec
Average diversification
The 3 months correlation between Text and Genomtec is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Text SA and Genomtec SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genomtec SA and Text SA 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 Text SA are associated (or correlated) with Genomtec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genomtec SA has no effect on the direction of Text SA i.e., Text SA and Genomtec go up and down completely randomly.
Pair Corralation between Text SA and Genomtec
Assuming the 90 days trading horizon Text SA is expected to generate 1.18 times more return on investment than Genomtec. However, Text SA is 1.18 times more volatile than Genomtec SA. It trades about 0.15 of its potential returns per unit of risk. Genomtec SA is currently generating about -0.33 per unit of risk. If you would invest 5,910 in Text SA on September 5, 2024 and sell it today you would earn a total of 560.00 from holding Text SA or generate 9.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Text SA vs. Genomtec SA
Performance |
| Timeline |
| Text SA |
| Genomtec SA |
Text SA and Genomtec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Text SA and Genomtec
The main advantage of trading using opposite Text SA and Genomtec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Text SA position performs unexpectedly, Genomtec 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 Genomtec will offset losses from the drop in Genomtec's long position.| Text SA vs. Banco Santander SA | Text SA vs. UniCredit SpA | Text SA vs. CEZ as | Text SA vs. Polski Koncern Naftowy |
| Genomtec vs. Banco Santander SA | Genomtec vs. UniCredit SpA | Genomtec vs. CEZ as | Genomtec vs. Polski Koncern Naftowy |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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