Correlation Between Valens and GEN Restaurant

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

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

Diversification Opportunities for Valens and GEN Restaurant

-0.19

Correlation Coefficient

Valens  GEN Restaurant

Good diversification

The 3 months correlation between Valens and GEN is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Valens and GEN Restaurant Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEN Restaurant Group, and Valens 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 Valens are associated (or correlated) with GEN Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEN Restaurant Group, has no effect on the direction of Valens i.e., Valens and GEN Restaurant go up and down completely randomly.

Pair Corralation between Valens and GEN Restaurant

Considering the 90-day investment horizon Valens is expected to under-perform the GEN Restaurant. In addition to that, Valens is 1.29 times more volatile than GEN Restaurant Group,. It trades about -0.06 of its total potential returns per unit of risk. GEN Restaurant Group, is currently generating about -0.02 per unit of volatility. If you would invest  906.00  in GEN Restaurant Group, on September 26, 2024 and sell it today you would lose (159.00) from holding GEN Restaurant Group, or give up 17.55% of portfolio value over 90 days.

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

Valens  vs.  GEN Restaurant Group,

Valens

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Valens has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

GEN Restaurant Group,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GEN Restaurant Group, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, GEN Restaurant is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Valens and GEN Restaurant

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

The idea behind Valens and GEN Restaurant Group, 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 Transaction History module to view history of all your transactions and understand their impact on performance.