Correlation Between Goodfellow and Genesis Land

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

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

Diversification Opportunities for Goodfellow and Genesis Land

0.3

Correlation Coefficient

Goodfellow  Genesis Land

Weak diversification

The 3 months correlation between Goodfellow and Genesis is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Goodfellow 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 Goodfellow 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 Goodfellow 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 Goodfellow i.e., Goodfellow and Genesis Land go up and down completely randomly.

Pair Corralation between Goodfellow and Genesis Land

Assuming the 90 days trading horizon Goodfellow is expected to generate 0.27 times more return on investment than Genesis Land. However, Goodfellow is 3.69 times less risky than Genesis Land. It trades about -0.05 of its potential returns per unit of risk. Genesis Land Development is currently generating about -0.2 per unit of risk. If you would invest  1,363  in Goodfellow on September 22, 2024 and sell it today you would lose (14.00) from holding Goodfellow or give up 1.03% of portfolio value over 90 days.

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

Goodfellow  vs.  Genesis Land Development

Goodfellow

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goodfellow has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Goodfellow is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the 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 weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Goodfellow and Genesis Land

The main advantage of trading using opposite Goodfellow and Genesis Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodfellow 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 Goodfellow 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.

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 Global Correlations module to find global opportunities by holding instruments from different markets.