Correlation Between Superior Plus and Genesco

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

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

Diversification Opportunities for Superior Plus and Genesco

-0.26

Correlation Coefficient

Superior Plus  Genesco

Very good diversification

The 3 months correlation between Superior and Genesco is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Genesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesco and Superior Plus 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 Superior Plus Corp are associated (or correlated) with Genesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesco has no effect on the direction of Superior Plus i.e., Superior Plus and Genesco go up and down completely randomly.

Pair Corralation between Superior Plus and Genesco

Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Genesco. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 1.86 times less risky than Genesco. The stock trades about -0.03 of its potential returns per unit of risk. The Genesco is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  4,440  in Genesco on October 23, 2024 and sell it today you would lose (560.00) from holding Genesco or give up 12.61% of portfolio value over 90 days.

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

Superior Plus Corp  vs.  Genesco

Superior Plus Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Superior Plus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Superior Plus is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Genesco

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Genesco are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Genesco reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Superior Plus and Genesco

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

The idea behind Superior Plus Corp and Genesco 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.