Correlation Between GEN Restaurant and Everspin Technologies

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

Diversification Opportunities for GEN Restaurant and Everspin Technologies

-0.3

Correlation Coefficient

GEN Restaurant  Everspin Technologies

Very good diversification

The 3 months correlation between GEN and Everspin is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding GEN Restaurant Group, and Everspin Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everspin Technologies 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 Everspin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everspin Technologies has no effect on the direction of GEN Restaurant i.e., GEN Restaurant and Everspin Technologies go up and down completely randomly.

Pair Corralation between GEN Restaurant and Everspin Technologies

Given the investment horizon of 90 days GEN Restaurant Group, is expected to under-perform the Everspin Technologies. In addition to that, GEN Restaurant is 1.38 times more volatile than Everspin Technologies. It trades about -0.14 of its total potential returns per unit of risk. Everspin Technologies is currently generating about -0.03 per unit of volatility. If you would invest  647.00  in Everspin Technologies on October 11, 2024 and sell it today you would lose (9.00) from holding Everspin Technologies or give up 1.39% 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.  Everspin Technologies

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

Everspin Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Everspin Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Everspin Technologies is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with GEN Restaurant and Everspin Technologies

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

The idea behind GEN Restaurant Group, and Everspin Technologies 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.