Correlation Between Bri Chem and Genesis Land

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

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

Diversification Opportunities for Bri Chem and Genesis Land

-0.4

Correlation Coefficient

Bri Chem  Genesis Land

Very good diversification

The 3 months correlation between Bri and Genesis is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bri Chem Corp and Genesis Land Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Land Development and Bri Chem 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 Bri Chem Corp are associated (or correlated) with Genesis Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Land Development has no effect on the direction of Bri Chem i.e., Bri Chem and Genesis Land go up and down completely randomly.

Pair Corralation between Bri Chem and Genesis Land

Assuming the 90 days trading horizon Bri Chem Corp is expected to generate 3.16 times more return on investment than Genesis Land. However, Bri Chem is 3.16 times more volatile than Genesis Land Development. It trades about -0.01 of its potential returns per unit of risk. Genesis Land Development is currently generating about -0.15 per unit of risk. If you would invest  36.00  in Bri Chem Corp on December 11, 2024 and sell it today you would lose (2.00) from holding Bri Chem Corp or give up 5.56% of portfolio value over 90 days.

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

Bri Chem Corp  vs.  Genesis Land Development

Bri Chem Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bri Chem Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Bri Chem may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Genesis Land Development

Risk-Adjusted Performance

Very Weak

Over the last 90 days Genesis Land Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Bri Chem and Genesis Land

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

The idea behind Bri Chem Corp and Genesis Land Development 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..