Correlation Between Allient and GEN Restaurant

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

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

Diversification Opportunities for Allient and GEN Restaurant

-0.1

Correlation Coefficient

Allient  GEN Restaurant

Good diversification

The 3 months correlation between Allient and GEN is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Allient and GEN Restaurant Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEN Restaurant Group, and Allient 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 Allient are associated (or correlated) with GEN Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEN Restaurant Group, has no effect on the direction of Allient i.e., Allient and GEN Restaurant go up and down completely randomly.

Pair Corralation between Allient and GEN Restaurant

Given the investment horizon of 90 days Allient is expected to generate 0.65 times more return on investment than GEN Restaurant. However, Allient is 1.53 times less risky than GEN Restaurant. It trades about 0.0 of its potential returns per unit of risk. GEN Restaurant Group, is currently generating about -0.08 per unit of risk. If you would invest  2,400  in Allient on December 27, 2024 and sell it today you would lose (64.00) from holding Allient or give up 2.67% of portfolio value over 90 days.

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

Allient  vs.  GEN Restaurant Group,

Allient

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allient has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Allient is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

GEN Restaurant Group,

Risk-Adjusted Performance

Very Weak

Over the last 90 days GEN Restaurant Group, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Allient and GEN Restaurant

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

The idea behind Allient and GEN Restaurant Group, 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.