Correlation Between GEN Restaurant and Forsys Metals

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

Diversification Opportunities for GEN Restaurant and Forsys Metals

-0.07

Correlation Coefficient

GEN Restaurant  Forsys Metals

Good diversification

The 3 months correlation between GEN and Forsys is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding GEN Restaurant Group, and Forsys Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forsys 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 Forsys Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forsys Metals Corp has no effect on the direction of GEN Restaurant i.e., GEN Restaurant and Forsys Metals go up and down completely randomly.

Pair Corralation between GEN Restaurant and Forsys Metals

Given the investment horizon of 90 days GEN Restaurant Group, is expected to generate 0.78 times more return on investment than Forsys Metals. However, GEN Restaurant Group, is 1.28 times less risky than Forsys Metals. It trades about -0.04 of its potential returns per unit of risk. Forsys Metals Corp is currently generating about -0.24 per unit of risk. If you would invest  777.00  in GEN Restaurant Group, on September 23, 2024 and sell it today you would lose (24.00) from holding GEN Restaurant Group, or give up 3.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

GEN Restaurant Group,  vs.  Forsys 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 quite persistent basic indicators, GEN Restaurant is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Forsys Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forsys Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with GEN Restaurant and Forsys Metals

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

The idea behind GEN Restaurant Group, and Forsys 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.