Correlation Between Generation Mining and EcoSynthetix

Can any of the company-specific risk be diversified away by investing in both Generation Mining and EcoSynthetix 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 Generation Mining and EcoSynthetix into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Generation Mining and EcoSynthetix, you can compare the effects of market volatilities on Generation Mining and EcoSynthetix 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 Generation Mining with a short position of EcoSynthetix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generation Mining and EcoSynthetix.

Diversification Opportunities for Generation Mining and EcoSynthetix

0.27

Correlation Coefficient

Generation Mining  EcoSynthetix

Modest diversification

The 3 months correlation between Generation and EcoSynthetix is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Generation Mining and EcoSynthetix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EcoSynthetix and Generation Mining 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 Generation Mining are associated (or correlated) with EcoSynthetix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EcoSynthetix has no effect on the direction of Generation Mining i.e., Generation Mining and EcoSynthetix go up and down completely randomly.

Pair Corralation between Generation Mining and EcoSynthetix

Assuming the 90 days trading horizon Generation Mining is expected to under-perform the EcoSynthetix. In addition to that, Generation Mining is 2.95 times more volatile than EcoSynthetix. It trades about -0.09 of its total potential returns per unit of risk. EcoSynthetix is currently generating about 0.24 per unit of volatility. If you would invest  385.00  in EcoSynthetix on October 9, 2024 and sell it today you would earn a total of  35.00  from holding EcoSynthetix or generate 9.09% return on investment over 90 days.

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

Generation Mining  vs.  EcoSynthetix

Generation Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Generation Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

EcoSynthetix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EcoSynthetix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Generation Mining and EcoSynthetix

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

The idea behind Generation Mining and EcoSynthetix 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.