Correlation Between Catcher Technology and Genius Electronic

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

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

Diversification Opportunities for Catcher Technology and Genius Electronic

-0.47

Correlation Coefficient

Catcher Technology  Genius Electronic

Very good diversification

The 3 months correlation between Catcher and Genius is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Catcher Technology Co and Genius Electronic Optical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genius Electronic Optical and Catcher Technology 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 Catcher Technology Co are associated (or correlated) with Genius Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genius Electronic Optical has no effect on the direction of Catcher Technology i.e., Catcher Technology and Genius Electronic go up and down completely randomly.

Pair Corralation between Catcher Technology and Genius Electronic

Assuming the 90 days trading horizon Catcher Technology Co is expected to generate 0.48 times more return on investment than Genius Electronic. However, Catcher Technology Co is 2.08 times less risky than Genius Electronic. It trades about 0.23 of its potential returns per unit of risk. Genius Electronic Optical is currently generating about -0.21 per unit of risk. If you would invest  19,300  in Catcher Technology Co on December 30, 2024 and sell it today you would earn a total of  2,050  from holding Catcher Technology Co or generate 10.62% return on investment over 90 days.

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

Catcher Technology Co  vs.  Genius Electronic Optical

Catcher Technology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Catcher Technology Co are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Catcher Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Genius Electronic Optical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Genius Electronic Optical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Catcher Technology and Genius Electronic

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

The idea behind Catcher Technology Co and Genius Electronic Optical 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.