Correlation Between Genasys and Mesa Laboratories

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

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

Diversification Opportunities for Genasys and Mesa Laboratories

-0.34

Correlation Coefficient

Genasys  Mesa Laboratories

Very good diversification

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

Pair Corralation between Genasys and Mesa Laboratories

Given the investment horizon of 90 days Genasys is expected to generate 0.72 times more return on investment than Mesa Laboratories. However, Genasys is 1.39 times less risky than Mesa Laboratories. It trades about 0.15 of its potential returns per unit of risk. Mesa Laboratories is currently generating about -0.01 per unit of risk. If you would invest  301.00  in Genasys on September 3, 2024 and sell it today you would earn a total of  76.00  from holding Genasys or generate 25.25% return on investment over 90 days.

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

Genasys  vs.  Mesa Laboratories

Genasys

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Genasys are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Genasys unveiled solid returns over the last few months and may actually be approaching a breakup point.

Mesa Laboratories

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Genasys and Mesa Laboratories

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

The idea behind Genasys and Mesa Laboratories 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.

Check out your portfolio center.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.