Correlation Between Sayona Mining and Genesis Energy

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

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

Diversification Opportunities for Sayona Mining and Genesis Energy

-0.09

Correlation Coefficient

Sayona Mining  Genesis Energy

Good diversification

The 3 months correlation between Sayona and Genesis is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sayona Mining and Genesis Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Energy and Sayona Mining 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 Sayona Mining are associated (or correlated) with Genesis Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Energy has no effect on the direction of Sayona Mining i.e., Sayona Mining and Genesis Energy go up and down completely randomly.

Pair Corralation between Sayona Mining and Genesis Energy

Assuming the 90 days trading horizon Sayona Mining is expected to under-perform the Genesis Energy. In addition to that, Sayona Mining is 1.97 times more volatile than Genesis Energy. It trades about -0.1 of its total potential returns per unit of risk. Genesis Energy is currently generating about -0.02 per unit of volatility. If you would invest  203.00  in Genesis Energy on December 22, 2024 and sell it today you would lose (7.00) from holding Genesis Energy or give up 3.45% of portfolio value over 90 days.

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

Sayona Mining  vs.  Genesis Energy

Sayona Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sayona Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain 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 Energy

Risk-Adjusted Performance

Weak

Over the last 90 days Genesis Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Genesis Energy is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sayona Mining and Genesis Energy

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

The idea behind Sayona Mining and Genesis Energy 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.