Correlation Between Northern Sphere and Genesis Electronics

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

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

Diversification Opportunities for Northern Sphere and Genesis Electronics

0.0

Correlation Coefficient

Northern Sphere  Genesis Electronics

Pay attention - limited upside

The 3 months correlation between Northern and Genesis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Northern Sphere Mining and Genesis Electronics Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Electronics and Northern Sphere 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 Northern Sphere Mining 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 Northern Sphere i.e., Northern Sphere and Genesis Electronics go up and down completely randomly.

Pair Corralation between Northern Sphere and Genesis Electronics

If you would invest  0.01  in Genesis Electronics Group on December 30, 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	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Northern Sphere Mining  vs.  Genesis Electronics Group

Northern Sphere Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Northern Sphere Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Northern Sphere is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

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 Northern Sphere and Genesis Electronics

The main advantage of trading using opposite Northern Sphere and Genesis Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Sphere 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 Northern Sphere Mining 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.