Correlation Between Oscotec and Genolution

Can any of the company-specific risk be diversified away by investing in both Oscotec and Genolution 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 Oscotec and Genolution into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Oscotec and Genolution, you can compare the effects of market volatilities on Oscotec and Genolution 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 Oscotec with a short position of Genolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oscotec and Genolution.

Diversification Opportunities for Oscotec and Genolution

0.91

Correlation Coefficient

Oscotec  Genolution

Almost no diversification

The 3 months correlation between Oscotec and Genolution is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Oscotec and Genolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genolution and Oscotec 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 Oscotec are associated (or correlated) with Genolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genolution has no effect on the direction of Oscotec i.e., Oscotec and Genolution go up and down completely randomly.

Pair Corralation between Oscotec and Genolution

Assuming the 90 days trading horizon Oscotec is expected to generate 2.21 times less return on investment than Genolution. But when comparing it to its historical volatility, Oscotec is 1.02 times less risky than Genolution. It trades about 0.05 of its potential returns per unit of risk. Genolution is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  234,500  in Genolution on November 28, 2024 and sell it today you would earn a total of  38,000  from holding Genolution or generate 16.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Oscotec  vs.  Genolution

Oscotec

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Oscotec are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Oscotec may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Genolution

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Genolution are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Genolution sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oscotec and Genolution

The main advantage of trading using opposite Oscotec and Genolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oscotec position performs unexpectedly, Genolution 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 Genolution will offset losses from the drop in Genolution's long position.

The idea behind Oscotec and Genolution pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.