Correlation Between Genovis AB and Net Insight

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

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

Diversification Opportunities for Genovis AB and Net Insight

0.34

Correlation Coefficient

Genovis AB  Net Insight

Weak diversification

The 3 months correlation between Genovis and Net is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Genovis AB and Net Insight AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Net Insight AB and Genovis AB 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 Genovis AB are associated (or correlated) with Net Insight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Net Insight AB has no effect on the direction of Genovis AB i.e., Genovis AB and Net Insight go up and down completely randomly.

Pair Corralation between Genovis AB and Net Insight

Assuming the 90 days trading horizon Genovis AB is expected to generate 1.38 times more return on investment than Net Insight. However, Genovis AB is 1.38 times more volatile than Net Insight AB. It trades about -0.07 of its potential returns per unit of risk. Net Insight AB is currently generating about -0.2 per unit of risk. If you would invest  2,470  in Genovis AB on December 30, 2024 and sell it today you would lose (600.00) from holding Genovis AB or give up 24.29% of portfolio value over 90 days.

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

Genovis AB  vs.  Net Insight AB

Genovis AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Genovis AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Net Insight AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Net Insight AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Genovis AB and Net Insight

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

The idea behind Genovis AB and Net Insight AB 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.