Correlation Between Fathom Holdings and Generationome Properties

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

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

Diversification Opportunities for Fathom Holdings and Generationome Properties

0.88

Correlation Coefficient

Fathom Holdings  Generationome Properties

Very poor diversification

The 3 months correlation between Fathom and Generationome is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Fathom Holdings and Generationome Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generationome Properties and Fathom Holdings 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 Fathom Holdings are associated (or correlated) with Generationome Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generationome Properties has no effect on the direction of Fathom Holdings i.e., Fathom Holdings and Generationome Properties go up and down completely randomly.

Pair Corralation between Fathom Holdings and Generationome Properties

Given the investment horizon of 90 days Fathom Holdings is expected to under-perform the Generationome Properties. In addition to that, Fathom Holdings is 2.61 times more volatile than Generationome Properties. It trades about -0.44 of its total potential returns per unit of risk. Generationome Properties is currently generating about -0.41 per unit of volatility. If you would invest  200.00  in Generationome Properties on October 8, 2024 and sell it today you would lose (21.00) from holding Generationome Properties or give up 10.5% of portfolio value over 90 days.

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

Fathom Holdings  vs.  Generationome Properties

Fathom Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fathom Holdings 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 technical indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Generationome Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Generationome Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Fathom Holdings and Generationome Properties

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

The idea behind Fathom Holdings and Generationome Properties 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.