Correlation Between Yellow Pages and Genesis Land

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

By analyzing existing cross correlation between Yellow Pages Limited and Genesis Land Development, you can compare the effects of market volatilities on Yellow Pages and Genesis Land 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 Yellow Pages with a short position of Genesis Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yellow Pages and Genesis Land.

Diversification Opportunities for Yellow Pages and Genesis Land

-0.65

Correlation Coefficient

Yellow Pages  Genesis Land

Excellent diversification

The 3 months correlation between Yellow and Genesis is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Yellow Pages Limited and Genesis Land Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Land Development and Yellow Pages 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 Yellow Pages Limited are associated (or correlated) with Genesis Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Land Development has no effect on the direction of Yellow Pages i.e., Yellow Pages and Genesis Land go up and down completely randomly.

Pair Corralation between Yellow Pages and Genesis Land

Given the investment horizon of 90 days Yellow Pages Limited is expected to generate 0.57 times more return on investment than Genesis Land. However, Yellow Pages Limited is 1.76 times less risky than Genesis Land. It trades about 0.04 of its potential returns per unit of risk. Genesis Land Development is currently generating about -0.2 per unit of risk. If you would invest  1,119  in Yellow Pages Limited on September 22, 2024 and sell it today you would earn a total of  12.00  from holding Yellow Pages Limited or generate 1.07% return on investment over 90 days.

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

Yellow Pages Limited  vs.  Genesis Land Development

Yellow Pages Limited

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Yellow Pages Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Yellow Pages displayed solid returns over the last few months and may actually be approaching a breakup point.

Genesis Land Development

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Yellow Pages and Genesis Land

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

The idea behind Yellow Pages Limited and Genesis Land Development 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.