Correlation Between Genius and Global Tech

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

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

Diversification Opportunities for Genius and Global Tech

-0.78

Correlation Coefficient

Genius  Global Tech

Pay attention - limited upside

The 3 months correlation between Genius and Global is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Genius Group and Global Tech Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Tech Industries and Genius 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 Genius Group are associated (or correlated) with Global Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Tech Industries has no effect on the direction of Genius i.e., Genius and Global Tech go up and down completely randomly.

Pair Corralation between Genius and Global Tech

Considering the 90-day investment horizon Genius Group is expected to under-perform the Global Tech. But the stock apears to be less risky and, when comparing its historical volatility, Genius Group is 5.02 times less risky than Global Tech. The stock trades about -0.1 of its potential returns per unit of risk. The Global Tech Industries is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Global Tech Industries on December 27, 2024 and sell it today you would earn a total of  13.00  from holding Global Tech Industries or generate 433.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Genius Group  vs.  Global Tech Industries

Genius Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Genius Group 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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Global Tech Industries

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global Tech Industries are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, Global Tech demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genius and Global Tech

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

The idea behind Genius Group and Global Tech Industries 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.