Correlation Between Newegg Commerce and Genesco

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

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

Diversification Opportunities for Newegg Commerce and Genesco

-0.79

Correlation Coefficient

Newegg Commerce  Genesco

Pay attention - limited upside

The 3 months correlation between Newegg and Genesco is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Newegg Commerce and Genesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesco and Newegg Commerce 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 Newegg Commerce are associated (or correlated) with Genesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesco has no effect on the direction of Newegg Commerce i.e., Newegg Commerce and Genesco go up and down completely randomly.

Pair Corralation between Newegg Commerce and Genesco

Given the investment horizon of 90 days Newegg Commerce is expected to under-perform the Genesco. In addition to that, Newegg Commerce is 1.58 times more volatile than Genesco. It trades about -0.21 of its total potential returns per unit of risk. Genesco is currently generating about 0.22 per unit of volatility. If you would invest  3,741  in Genesco on October 6, 2024 and sell it today you would earn a total of  528.00  from holding Genesco or generate 14.11% return on investment over 90 days.

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

Newegg Commerce  vs.  Genesco

Newegg Commerce

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Newegg Commerce has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Genesco

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Genesco are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Genesco displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Newegg Commerce and Genesco

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

The idea behind Newegg Commerce and Genesco 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.