Correlation Between GEN Restaurant and Sapiens International

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

Diversification Opportunities for GEN Restaurant and Sapiens International

-0.13

Correlation Coefficient

GEN Restaurant  Sapiens International

Good diversification

The 3 months correlation between GEN and Sapiens is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding GEN Restaurant Group, and Sapiens International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sapiens International 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 Sapiens International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sapiens International has no effect on the direction of GEN Restaurant i.e., GEN Restaurant and Sapiens International go up and down completely randomly.

Pair Corralation between GEN Restaurant and Sapiens International

Given the investment horizon of 90 days GEN Restaurant Group, is expected to under-perform the Sapiens International. In addition to that, GEN Restaurant is 2.8 times more volatile than Sapiens International. It trades about -0.05 of its total potential returns per unit of risk. Sapiens International is currently generating about 0.0 per unit of volatility. If you would invest  2,776  in Sapiens International on December 20, 2024 and sell it today you would lose (22.00) from holding Sapiens International or give up 0.79% 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.  Sapiens International

GEN Restaurant Group,

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Sapiens International

Risk-Adjusted Performance

Weak

Over the last 90 days Sapiens International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Sapiens International is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GEN Restaurant and Sapiens International

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

The idea behind GEN Restaurant Group, and Sapiens International 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 Directory module to find actively traded commodities issued by global exchanges.