Correlation Between EMBARQ and Genesco

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

By analyzing existing cross correlation between EMBARQ P 7995 and Genesco, you can compare the effects of market volatilities on EMBARQ 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 EMBARQ with a short position of Genesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMBARQ and Genesco.

Diversification Opportunities for EMBARQ and Genesco

0.85

Correlation Coefficient

EMBARQ  Genesco

Very poor diversification

The 3 months correlation between EMBARQ and Genesco is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding EMBARQ P 7995 and Genesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesco and EMBARQ 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 EMBARQ P 7995 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 EMBARQ i.e., EMBARQ and Genesco go up and down completely randomly.

Pair Corralation between EMBARQ and Genesco

Assuming the 90 days trading horizon EMBARQ P 7995 is expected to generate 1.33 times more return on investment than Genesco. However, EMBARQ is 1.33 times more volatile than Genesco. It trades about 0.05 of its potential returns per unit of risk. Genesco is currently generating about -0.23 per unit of risk. If you would invest  5,400  in EMBARQ P 7995 on December 25, 2024 and sell it today you would earn a total of  400.00  from holding EMBARQ P 7995 or generate 7.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.33%
Values	Daily Returns

EMBARQ P 7995  vs.  Genesco

EMBARQ P 7995

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in EMBARQ P 7995 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, EMBARQ sustained solid returns over the last few months and may actually be approaching a breakup point.

Genesco

Risk-Adjusted Performance

Very Weak

Over the last 90 days Genesco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with EMBARQ and Genesco

The main advantage of trading using opposite EMBARQ and Genesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMBARQ 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 EMBARQ P 7995 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.