Correlation Between Genesco and WesBanco

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

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

Diversification Opportunities for Genesco and WesBanco

0.76

Correlation Coefficient

Genesco  WesBanco

Poor diversification

The 3 months correlation between Genesco and WesBanco is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Genesco and WesBanco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WesBanco and Genesco 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 Genesco are associated (or correlated) with WesBanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WesBanco has no effect on the direction of Genesco i.e., Genesco and WesBanco go up and down completely randomly.

Pair Corralation between Genesco and WesBanco

Considering the 90-day investment horizon Genesco is expected to generate 14.29 times more return on investment than WesBanco. However, Genesco is 14.29 times more volatile than WesBanco. It trades about 0.26 of its potential returns per unit of risk. WesBanco is currently generating about 0.16 per unit of risk. If you would invest  2,945  in Genesco on October 7, 2024 and sell it today you would earn a total of  1,324  from holding Genesco or generate 44.96% return on investment over 90 days.

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

Genesco  vs.  WesBanco

Genesco

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Genesco are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Genesco displayed solid returns over the last few months and may actually be approaching a breakup point.

WesBanco

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WesBanco are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, WesBanco is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Genesco and WesBanco

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

The idea behind Genesco and WesBanco 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.