Correlation Between GEN Restaurant and Inflection Point

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

Diversification Opportunities for GEN Restaurant and Inflection Point

-0.53

Correlation Coefficient

GEN Restaurant  Inflection Point

Excellent diversification

The 3 months correlation between GEN and Inflection is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding GEN Restaurant Group, and Inflection Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflection Point Acq 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 Inflection Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflection Point Acq has no effect on the direction of GEN Restaurant i.e., GEN Restaurant and Inflection Point go up and down completely randomly.

Pair Corralation between GEN Restaurant and Inflection Point

Given the investment horizon of 90 days GEN Restaurant is expected to generate 1.88 times less return on investment than Inflection Point. In addition to that, GEN Restaurant is 1.92 times more volatile than Inflection Point Acquisition. It trades about 0.02 of its total potential returns per unit of risk. Inflection Point Acquisition is currently generating about 0.05 per unit of volatility. If you would invest  1,038  in Inflection Point Acquisition on October 9, 2024 and sell it today you would earn a total of  275.00  from holding Inflection Point Acquisition or generate 26.49% return on investment over 90 days.

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

GEN Restaurant Group,  vs.  Inflection Point Acquisition

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 newest stock price mess, may contribute to short-term losses for the institutional investors.

Inflection Point Acq

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inflection Point Acquisition are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Inflection Point unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GEN Restaurant and Inflection Point

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

The idea behind GEN Restaurant Group, and Inflection Point Acquisition 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 CEOs Directory module to screen CEOs from public companies around the world.