Correlation Between Genertec Universal and Polyplex Public

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

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

Diversification Opportunities for Genertec Universal and Polyplex Public

0.56

Correlation Coefficient

Genertec Universal  Polyplex Public

Very weak diversification

The 3 months correlation between Genertec and Polyplex is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Genertec Universal Medical and Polyplex Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polyplex Public and Genertec Universal 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 Genertec Universal Medical are associated (or correlated) with Polyplex Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polyplex Public has no effect on the direction of Genertec Universal i.e., Genertec Universal and Polyplex Public go up and down completely randomly.

Pair Corralation between Genertec Universal and Polyplex Public

Assuming the 90 days horizon Genertec Universal Medical is expected to generate 1.61 times more return on investment than Polyplex Public. However, Genertec Universal is 1.61 times more volatile than Polyplex Public. It trades about -0.12 of its potential returns per unit of risk. Polyplex Public is currently generating about -0.31 per unit of risk. If you would invest  63.00  in Genertec Universal Medical on October 26, 2024 and sell it today you would lose (4.00) from holding Genertec Universal Medical or give up 6.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Genertec Universal Medical  vs.  Polyplex Public

Genertec Universal

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Genertec Universal Medical are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Genertec Universal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Polyplex Public

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Polyplex Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Polyplex Public reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genertec Universal and Polyplex Public

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

The idea behind Genertec Universal Medical and Polyplex Public 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.