Correlation Between Emergent Health and Genesis Electronics

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

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

Diversification Opportunities for Emergent Health and Genesis Electronics

0.0

Correlation Coefficient

Emergent Health  Genesis Electronics

Pay attention - limited upside

The 3 months correlation between Emergent and Genesis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Emergent Health Corp and Genesis Electronics Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Electronics and Emergent Health 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 Emergent Health Corp are associated (or correlated) with Genesis Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Electronics has no effect on the direction of Emergent Health i.e., Emergent Health and Genesis Electronics go up and down completely randomly.

Pair Corralation between Emergent Health and Genesis Electronics

Given the investment horizon of 90 days Emergent Health Corp is expected to generate 1.69 times more return on investment than Genesis Electronics. However, Emergent Health is 1.69 times more volatile than Genesis Electronics Group. It trades about 0.07 of its potential returns per unit of risk. Genesis Electronics Group is currently generating about -0.02 per unit of risk. If you would invest  0.10  in Emergent Health Corp on September 27, 2024 and sell it today you would lose (0.02) from holding Emergent Health Corp or give up 20.0% of portfolio value over 90 days.

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

Emergent Health Corp  vs.  Genesis Electronics Group

Emergent Health Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Emergent Health Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Genesis Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genesis Electronics Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Genesis Electronics is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Emergent Health and Genesis Electronics

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

The idea behind Emergent Health Corp and Genesis Electronics 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.

Check out your portfolio center.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.