Correlation Between Crombie Real and Genesis Land

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

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

Diversification Opportunities for Crombie Real and Genesis Land

0.26

Correlation Coefficient

Crombie Real  Genesis Land

Modest diversification

The 3 months correlation between Crombie and Genesis is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Crombie Real Estate 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 Crombie Real 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 Crombie Real Estate 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 Crombie Real i.e., Crombie Real and Genesis Land go up and down completely randomly.

Pair Corralation between Crombie Real and Genesis Land

Assuming the 90 days trading horizon Crombie Real Estate is expected to under-perform the Genesis Land. But the stock apears to be less risky and, when comparing its historical volatility, Crombie Real Estate is 2.75 times less risky than Genesis Land. The stock trades about -0.14 of its potential returns per unit of risk. The Genesis Land Development is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  387.00  in Genesis Land Development on September 12, 2024 and sell it today you would lose (35.00) from holding Genesis Land Development or give up 9.04% of portfolio value over 90 days.

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

Crombie Real Estate  vs.  Genesis Land Development

Crombie Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crombie Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Genesis Land Development

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Crombie Real and Genesis Land

The main advantage of trading using opposite Crombie Real and Genesis Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crombie Real 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 Crombie Real Estate 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 Commodity Directory module to find actively traded commodities issued by global exchanges.