Correlation Between GEN Restaurant and BTU Metals

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

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

Diversification Opportunities for GEN Restaurant and BTU Metals

0.06

Correlation Coefficient

GEN Restaurant  BTU Metals

Significant diversification

The 3 months correlation between GEN and BTU is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding GEN Restaurant Group, and BTU Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTU Metals Corp and GEN Restaurant 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 GEN Restaurant Group, are associated (or correlated) with BTU Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTU Metals Corp has no effect on the direction of GEN Restaurant i.e., GEN Restaurant and BTU Metals go up and down completely randomly.

Pair Corralation between GEN Restaurant and BTU Metals

If you would invest  2.00  in BTU Metals Corp on October 27, 2024 and sell it today you would earn a total of  0.00  from holding BTU Metals Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

GEN Restaurant Group,  vs.  BTU Metals Corp

GEN Restaurant Group,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GEN Restaurant Group, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

BTU Metals Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BTU Metals Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating primary indicators, BTU Metals may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with GEN Restaurant and BTU Metals

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

The idea behind GEN Restaurant Group, and BTU Metals Corp 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.