Correlation Between Genius Electronic and Merry Electronics

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

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

Diversification Opportunities for Genius Electronic and Merry Electronics

0.0

Correlation Coefficient

Genius Electronic  Merry Electronics

Pay attention - limited upside

The 3 months correlation between Genius and Merry is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Genius Electronic Optical and Merry Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merry Electronics and Genius Electronic 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 Genius Electronic Optical are associated (or correlated) with Merry Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merry Electronics has no effect on the direction of Genius Electronic i.e., Genius Electronic and Merry Electronics go up and down completely randomly.

Pair Corralation between Genius Electronic and Merry Electronics

If you would invest  8,400  in Merry Electronics Co on October 27, 2024 and sell it today you would earn a total of  2,200  from holding Merry Electronics Co or generate 26.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.21%
Values	Daily Returns

Genius Electronic Optical  vs.  Merry Electronics Co

Genius Electronic Optical

Risk-Adjusted Performance

0 of 100

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 fairly stable basic indicators, Genius Electronic is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Merry Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Merry Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Merry Electronics is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Genius Electronic and Merry Electronics

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

The idea behind Genius Electronic Optical and Merry Electronics Co 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 Transaction History module to view history of all your transactions and understand their impact on performance.