Correlation Between Vasta Platform and Genius

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

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

Diversification Opportunities for Vasta Platform and Genius

-0.43

Correlation Coefficient

Vasta Platform  Genius

Very good diversification

The 3 months correlation between Vasta and Genius is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Vasta Platform and Genius Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genius Group and Vasta Platform 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 Vasta Platform are associated (or correlated) with Genius. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genius Group has no effect on the direction of Vasta Platform i.e., Vasta Platform and Genius go up and down completely randomly.

Pair Corralation between Vasta Platform and Genius

Given the investment horizon of 90 days Vasta Platform is expected to under-perform the Genius. But the stock apears to be less risky and, when comparing its historical volatility, Vasta Platform is 31.68 times less risky than Genius. The stock trades about -0.07 of its potential returns per unit of risk. The Genius Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  292.00  in Genius Group on September 1, 2024 and sell it today you would lose (218.00) from holding Genius Group or give up 74.66% of portfolio value over 90 days.

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

Vasta Platform  vs.  Genius Group

Vasta Platform

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vasta Platform are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Vasta Platform sustained solid returns over the last few months and may actually be approaching a breakup point.

Genius Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Genius Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Genius unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vasta Platform and Genius

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

The idea behind Vasta Platform and Genius 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.