Correlation Between Genesis Electronics and Kellanova

Can any of the company-specific risk be diversified away by investing in both Genesis Electronics and Kellanova 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 Kellanova 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 Kellanova, you can compare the effects of market volatilities on Genesis Electronics and Kellanova 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 Kellanova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genesis Electronics and Kellanova.

Diversification Opportunities for Genesis Electronics and Kellanova

-0.04

Correlation Coefficient

Genesis Electronics  Kellanova

Good diversification

The 3 months correlation between Genesis and Kellanova is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Genesis Electronics Group and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova 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 Kellanova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellanova has no effect on the direction of Genesis Electronics i.e., Genesis Electronics and Kellanova go up and down completely randomly.

Pair Corralation between Genesis Electronics and Kellanova

Given the investment horizon of 90 days Genesis Electronics Group is expected to generate 82.11 times more return on investment than Kellanova. However, Genesis Electronics is 82.11 times more volatile than Kellanova. It trades about 0.06 of its potential returns per unit of risk. Kellanova is currently generating about 0.22 per unit of risk. If you would invest  0.01  in Genesis Electronics Group on December 26, 2024 and sell it today you would earn a total of  0.00  from holding Genesis Electronics Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Genesis Electronics Group  vs.  Kellanova

Genesis Electronics

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Genesis Electronics Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, Genesis Electronics demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Kellanova

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kellanova are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Kellanova is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Genesis Electronics and Kellanova

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

The idea behind Genesis Electronics Group and Kellanova 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.