Correlation Between GEN Restaurant and 456837AM5

Can any of the company-specific risk be diversified away by investing in both GEN Restaurant and 456837AM5 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 456837AM5 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 ING Groep NV, you can compare the effects of market volatilities on GEN Restaurant and 456837AM5 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 456837AM5. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEN Restaurant and 456837AM5.

Diversification Opportunities for GEN Restaurant and 456837AM5

-0.05

Correlation Coefficient

GEN Restaurant  456837AM5

Good diversification

The 3 months correlation between GEN and 456837AM5 is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding GEN Restaurant Group, and ING Groep NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ING Groep NV 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 456837AM5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ING Groep NV has no effect on the direction of GEN Restaurant i.e., GEN Restaurant and 456837AM5 go up and down completely randomly.

Pair Corralation between GEN Restaurant and 456837AM5

Given the investment horizon of 90 days GEN Restaurant Group, is expected to generate 3.93 times more return on investment than 456837AM5. However, GEN Restaurant is 3.93 times more volatile than ING Groep NV. It trades about 0.0 of its potential returns per unit of risk. ING Groep NV is currently generating about -0.11 per unit of risk. If you would invest  836.00  in GEN Restaurant Group, on September 19, 2024 and sell it today you would lose (46.00) from holding GEN Restaurant Group, or give up 5.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	92.06%
Values	Daily Returns

GEN Restaurant Group,  vs.  ING Groep NV

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.

ING Groep NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ING Groep NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for ING Groep NV investors.

Pair Trading with GEN Restaurant and 456837AM5

The main advantage of trading using opposite GEN Restaurant and 456837AM5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEN Restaurant position performs unexpectedly, 456837AM5 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 456837AM5 will offset losses from the drop in 456837AM5's long position.

The idea behind GEN Restaurant Group, and ING Groep NV 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.