Correlation Between ThredUp and Genel Energy

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

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

Diversification Opportunities for ThredUp and Genel Energy

-0.81

Correlation Coefficient

ThredUp  Genel Energy

Pay attention - limited upside

The 3 months correlation between ThredUp and Genel is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding ThredUp and Genel Energy plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genel Energy plc and ThredUp 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 ThredUp are associated (or correlated) with Genel Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genel Energy plc has no effect on the direction of ThredUp i.e., ThredUp and Genel Energy go up and down completely randomly.

Pair Corralation between ThredUp and Genel Energy

Given the investment horizon of 90 days ThredUp is expected to under-perform the Genel Energy. In addition to that, ThredUp is 2.0 times more volatile than Genel Energy plc. It trades about -0.23 of its total potential returns per unit of risk. Genel Energy plc is currently generating about 0.14 per unit of volatility. If you would invest  82.00  in Genel Energy plc on October 12, 2024 and sell it today you would earn a total of  6.00  from holding Genel Energy plc or generate 7.32% return on investment over 90 days.

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

ThredUp  vs.  Genel Energy plc

ThredUp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ThredUp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, ThredUp reported solid returns over the last few months and may actually be approaching a breakup point.

Genel Energy plc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with ThredUp and Genel Energy

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

The idea behind ThredUp and Genel Energy plc 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.