Correlation Between BTU Metals and GEN Restaurant

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

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

Diversification Opportunities for BTU Metals and GEN Restaurant

-0.44

Correlation Coefficient

BTU Metals  GEN Restaurant

Very good diversification

The 3 months correlation between BTU and GEN is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding BTU Metals Corp 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 BTU Metals 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 BTU Metals Corp 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 BTU Metals i.e., BTU Metals and GEN Restaurant go up and down completely randomly.

Pair Corralation between BTU Metals and GEN Restaurant

Assuming the 90 days horizon BTU Metals Corp is expected to generate 2.58 times more return on investment than GEN Restaurant. However, BTU Metals is 2.58 times more volatile than GEN Restaurant Group,. It trades about 0.1 of its potential returns per unit of risk. GEN Restaurant Group, is currently generating about -0.06 per unit of risk. If you would invest  2.01  in BTU Metals Corp on December 17, 2024 and sell it today you would earn a total of  0.78  from holding BTU Metals Corp or generate 38.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

BTU Metals Corp  vs.  GEN Restaurant Group,

BTU Metals Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BTU Metals Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, BTU Metals reported solid returns over the last few months and may actually be approaching a breakup point.

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 inconsistent 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 BTU Metals and GEN Restaurant

The main advantage of trading using opposite BTU Metals and GEN Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTU Metals 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 BTU Metals Corp 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.