Correlation Between John B and Genesis Electronics

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

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

Diversification Opportunities for John B and Genesis Electronics

-0.08

Correlation Coefficient

John B  Genesis Electronics

Good diversification

The 3 months correlation between John and Genesis is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding John B Sanfilippo and Genesis Electronics Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Electronics and John B 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 John B Sanfilippo 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 John B i.e., John B and Genesis Electronics go up and down completely randomly.

Pair Corralation between John B and Genesis Electronics

Given the investment horizon of 90 days John B Sanfilippo is expected to under-perform the Genesis Electronics. But the stock apears to be less risky and, when comparing its historical volatility, John B Sanfilippo is 7.26 times less risky than Genesis Electronics. The stock trades about -0.2 of its potential returns per unit of risk. The Genesis Electronics Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Genesis Electronics Group on December 3, 2024 and sell it today you would earn a total of  0.00  from holding Genesis Electronics Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.56%
Values	Daily Returns

John B Sanfilippo  vs.  Genesis Electronics Group

John B Sanfilippo

Risk-Adjusted Performance

Very Weak

Over the last 90 days John B Sanfilippo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady 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.

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 John B and Genesis Electronics

The main advantage of trading using opposite John B and Genesis Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John B 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 John B Sanfilippo 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.