Correlation Between Genesis Electronics and Protext Mobility

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

Diversification Opportunities for Genesis Electronics and Protext Mobility

-0.02

Correlation Coefficient

Genesis Electronics  Protext Mobility

Good diversification

The 3 months correlation between Genesis and Protext is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Genesis Electronics Group and Protext Mobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protext Mobility 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 Protext Mobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protext Mobility has no effect on the direction of Genesis Electronics i.e., Genesis Electronics and Protext Mobility go up and down completely randomly.

Pair Corralation between Genesis Electronics and Protext Mobility

Given the investment horizon of 90 days Genesis Electronics Group is expected to generate 1.46 times more return on investment than Protext Mobility. However, Genesis Electronics is 1.46 times more volatile than Protext Mobility. It trades about 0.06 of its potential returns per unit of risk. Protext Mobility is currently generating about 0.05 per unit of risk. If you would invest  0.01  in Genesis Electronics Group on December 29, 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	98.39%
Values	Daily Returns

Genesis Electronics Group  vs.  Protext Mobility

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.

Protext Mobility

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Protext Mobility are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Protext Mobility displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genesis Electronics and Protext Mobility

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

The idea behind Genesis Electronics Group and Protext Mobility 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.