Correlation Between Rushnet and Genetron Holdings

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

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

Diversification Opportunities for Rushnet and Genetron Holdings

-0.3

Correlation Coefficient

Rushnet  Genetron Holdings

Very good diversification

The 3 months correlation between Rushnet and Genetron is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Rushnet and Genetron Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genetron Holdings and Rushnet 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 Rushnet are associated (or correlated) with Genetron Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genetron Holdings has no effect on the direction of Rushnet i.e., Rushnet and Genetron Holdings go up and down completely randomly.

Pair Corralation between Rushnet and Genetron Holdings

If you would invest  0.03  in Rushnet on September 15, 2024 and sell it today you would lose (0.02) from holding Rushnet or give up 66.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Rushnet  vs.  Genetron Holdings

Rushnet

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rushnet are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical indicators, Rushnet displayed solid returns over the last few months and may actually be approaching a breakup point.

Genetron Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genetron Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Genetron Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Rushnet and Genetron Holdings

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

The idea behind Rushnet and Genetron Holdings 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.