Correlation Between Volkswagen and Genesis Electronics
Can any of the company-specific risk be diversified away by investing in both Volkswagen 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 Volkswagen and Genesis Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG and Genesis Electronics Group, you can compare the effects of market volatilities on Volkswagen 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 Volkswagen with a short position of Genesis Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Genesis Electronics.
Diversification Opportunities for Volkswagen and Genesis Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Volkswagen and Genesis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG and Genesis Electronics Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Electronics and Volkswagen 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 Volkswagen AG 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 Volkswagen i.e., Volkswagen and Genesis Electronics go up and down completely randomly.
Pair Corralation between Volkswagen and Genesis Electronics
Assuming the 90 days horizon Volkswagen AG is expected to generate 0.08 times more return on investment than Genesis Electronics. However, Volkswagen AG is 12.39 times less risky than Genesis Electronics. It trades about -0.31 of its potential returns per unit of risk. Genesis Electronics Group is currently generating about -0.22 per unit of risk. If you would invest 9,801 in Volkswagen AG on September 1, 2024 and sell it today you would lose (1,101) from holding Volkswagen AG or give up 11.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volkswagen AG vs. Genesis Electronics Group
Performance |
| Timeline |
| Volkswagen AG |
| Genesis Electronics |
Volkswagen and Genesis Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and Genesis Electronics
The main advantage of trading using opposite Volkswagen and Genesis Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen 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.| Volkswagen vs. Volkswagen AG 110 | Volkswagen vs. Stellantis NV | Volkswagen vs. Toyota Motor | Volkswagen vs. Honda Motor Co |
| Genesis Electronics vs. Volkswagen AG | Genesis Electronics vs. Vicinity Motor Corp | Genesis Electronics vs. Volcon Inc | Genesis Electronics vs. Volkswagen AG Pref |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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