Correlation Between Industrial Nanotech and Genesis Electronics

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

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

Diversification Opportunities for Industrial Nanotech and Genesis Electronics

0.01

Correlation Coefficient

Industrial Nanotech  Genesis Electronics

Significant diversification

The 3 months correlation between Industrial and Genesis is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Nanotech and Genesis Electronics Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Electronics and Industrial Nanotech 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 Industrial Nanotech are associated (or correlated) with Genesis Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Electronics has no effect on the direction of Industrial Nanotech i.e., Industrial Nanotech and Genesis Electronics go up and down completely randomly.

Pair Corralation between Industrial Nanotech and Genesis Electronics

Given the investment horizon of 90 days Industrial Nanotech is expected to generate 19.36 times more return on investment than Genesis Electronics. However, Industrial Nanotech is 19.36 times more volatile than Genesis Electronics Group. It trades about 0.26 of its potential returns per unit of risk. Genesis Electronics Group is currently generating about 0.06 per unit of risk. If you would invest  0.01  in Industrial Nanotech on December 30, 2024 and sell it today you would earn a total of  0.00  from holding Industrial Nanotech or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Industrial Nanotech  vs.  Genesis Electronics Group

Industrial Nanotech

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Industrial Nanotech are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Industrial Nanotech disclosed solid returns over the last few months and may actually be approaching a breakup point.

Genesis Electronics

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Genesis Electronics Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, Genesis Electronics demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Industrial Nanotech and Genesis Electronics

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

The idea behind Industrial Nanotech and Genesis Electronics Group 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 Global Correlations module to find global opportunities by holding instruments from different markets.