Correlation Between EMCORE and Genesis Growth

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

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

Diversification Opportunities for EMCORE and Genesis Growth

0.0

Correlation Coefficient

EMCORE  Genesis Growth

Pay attention - limited upside

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

Pair Corralation between EMCORE and Genesis Growth

If you would invest  233.00  in EMCORE on October 7, 2024 and sell it today you would earn a total of  65.00  from holding EMCORE or generate 27.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

EMCORE  vs.  Genesis Growth Tech

EMCORE

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EMCORE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal forward-looking signals, EMCORE reported solid returns over the last few months and may actually be approaching a breakup point.

Genesis Growth Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genesis Growth Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Genesis Growth is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with EMCORE and Genesis Growth

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

The idea behind EMCORE and Genesis Growth Tech 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.