Correlation Between Genesis Electronics and BRF SA

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

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

Diversification Opportunities for Genesis Electronics and BRF SA

0.0

Correlation Coefficient

Genesis Electronics  BRF SA

Pay attention - limited upside

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

Pair Corralation between Genesis Electronics and BRF SA

If you would invest  427.00  in BRF SA ADR on September 12, 2024 and sell it today you would earn a total of  40.00  from holding BRF SA ADR or generate 9.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Genesis Electronics Group  vs.  BRF SA ADR

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 newest stock price confusion, may contribute to short-horizon losses for the traders.

BRF SA ADR

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BRF SA ADR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, BRF SA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Genesis Electronics and BRF SA

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

The idea behind Genesis Electronics Group and BRF SA ADR 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.