Correlation Between GEN Restaurant and NESNVX

Can any of the company-specific risk be diversified away by investing in both GEN Restaurant and NESNVX 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 NESNVX 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 NESNVX 5 14 MAR 28, you can compare the effects of market volatilities on GEN Restaurant and NESNVX 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 NESNVX. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEN Restaurant and NESNVX.

Diversification Opportunities for GEN Restaurant and NESNVX

0.49

Correlation Coefficient

GEN Restaurant  NESNVX

Very weak diversification

The 3 months correlation between GEN and NESNVX is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding GEN Restaurant Group, and NESNVX 5 14 MAR 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESNVX 5 14 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 NESNVX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESNVX 5 14 has no effect on the direction of GEN Restaurant i.e., GEN Restaurant and NESNVX go up and down completely randomly.

Pair Corralation between GEN Restaurant and NESNVX

Given the investment horizon of 90 days GEN Restaurant Group, is expected to generate 92.68 times more return on investment than NESNVX. However, GEN Restaurant is 92.68 times more volatile than NESNVX 5 14 MAR 28. It trades about 0.05 of its potential returns per unit of risk. NESNVX 5 14 MAR 28 is currently generating about 0.0 per unit of risk. If you would invest  0.00  in GEN Restaurant Group, on September 21, 2024 and sell it today you would earn a total of  738.00  from holding GEN Restaurant Group, or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	65.87%
Values	Daily Returns

GEN Restaurant Group,  vs.  NESNVX 5 14 MAR 28

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.

NESNVX 5 14

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 5 14 MAR 28 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NESNVX is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GEN Restaurant and NESNVX

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

The idea behind GEN Restaurant Group, and NESNVX 5 14 MAR 28 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.