Correlation Between Genovis AB and Stille AB

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

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

Diversification Opportunities for Genovis AB and Stille AB

0.12

Correlation Coefficient

Genovis AB  Stille AB

Average diversification

The 3 months correlation between Genovis and Stille is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Genovis AB and Stille AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stille 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 Stille AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stille AB has no effect on the direction of Genovis AB i.e., Genovis AB and Stille AB go up and down completely randomly.

Pair Corralation between Genovis AB and Stille AB

Assuming the 90 days trading horizon Genovis AB is expected to under-perform the Stille AB. In addition to that, Genovis AB is 1.52 times more volatile than Stille AB. It trades about -0.07 of its total potential returns per unit of risk. Stille AB is currently generating about 0.05 per unit of volatility. If you would invest  21,400  in Stille AB on December 31, 2024 and sell it today you would earn a total of  1,600  from holding Stille AB or generate 7.48% return on investment over 90 days.

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

Genovis AB  vs.  Stille 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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Stille AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stille AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Stille AB may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Genovis AB and Stille AB

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

The idea behind Genovis AB and Stille 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.