Correlation Between 512807AV0 and Genesco

Can any of the company-specific risk be diversified away by investing in both 512807AV0 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 512807AV0 and Genesco into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LAM RESEARCH PORATION and Genesco, you can compare the effects of market volatilities on 512807AV0 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 512807AV0 with a short position of Genesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of 512807AV0 and Genesco.

Diversification Opportunities for 512807AV0 and Genesco

-0.47

Correlation Coefficient

512807AV0  Genesco

Very good diversification

The 3 months correlation between 512807AV0 and Genesco is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding LAM RESEARCH PORATION and Genesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesco and 512807AV0 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 LAM RESEARCH PORATION 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 512807AV0 i.e., 512807AV0 and Genesco go up and down completely randomly.

Pair Corralation between 512807AV0 and Genesco

Assuming the 90 days trading horizon 512807AV0 is expected to generate 134.84 times less return on investment than Genesco. But when comparing it to its historical volatility, LAM RESEARCH PORATION is 5.27 times less risky than Genesco. It trades about 0.01 of its potential returns per unit of risk. Genesco is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  2,736  in Genesco on October 7, 2024 and sell it today you would earn a total of  1,533  from holding Genesco or generate 56.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	92.06%
Values	Daily Returns

LAM RESEARCH PORATION  vs.  Genesco

LAM RESEARCH PORATION

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LAM RESEARCH PORATION has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 512807AV0 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Genesco

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Genesco are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Genesco displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 512807AV0 and Genesco

The main advantage of trading using opposite 512807AV0 and Genesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 512807AV0 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 LAM RESEARCH PORATION 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.

Check out your portfolio center.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.