Correlation Between ANZ Group and Genesis Resources

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

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

Diversification Opportunities for ANZ Group and Genesis Resources

-0.38

Correlation Coefficient

ANZ Group  Genesis Resources

Very good diversification

The 3 months correlation between ANZ and Genesis is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding ANZ Group Holdings and Genesis Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Resources and ANZ Group 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 ANZ Group Holdings are associated (or correlated) with Genesis Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Resources has no effect on the direction of ANZ Group i.e., ANZ Group and Genesis Resources go up and down completely randomly.

Pair Corralation between ANZ Group and Genesis Resources

Assuming the 90 days trading horizon ANZ Group is expected to generate 13.31 times less return on investment than Genesis Resources. But when comparing it to its historical volatility, ANZ Group Holdings is 31.18 times less risky than Genesis Resources. It trades about 0.08 of its potential returns per unit of risk. Genesis Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  0.50  in Genesis Resources on October 22, 2024 and sell it today you would lose (0.10) from holding Genesis Resources or give up 20.0% of portfolio value over 90 days.

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

ANZ Group Holdings  vs.  Genesis Resources

ANZ Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANZ Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ANZ Group is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Genesis Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genesis Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with ANZ Group and Genesis Resources

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

The idea behind ANZ Group Holdings and Genesis Resources 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.