Correlation Between Ziff Davis and GEN Restaurant

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

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

Diversification Opportunities for Ziff Davis and GEN Restaurant

0.76

Correlation Coefficient

Ziff Davis  GEN Restaurant

Poor diversification

The 3 months correlation between Ziff and GEN is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ziff Davis 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 Ziff Davis 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 Ziff Davis 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 Ziff Davis i.e., Ziff Davis and GEN Restaurant go up and down completely randomly.

Pair Corralation between Ziff Davis and GEN Restaurant

Allowing for the 90-day total investment horizon Ziff Davis is expected to under-perform the GEN Restaurant. But the stock apears to be less risky and, when comparing its historical volatility, Ziff Davis is 2.11 times less risky than GEN Restaurant. The stock trades about -0.5 of its potential returns per unit of risk. The GEN Restaurant Group, is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  569.00  in GEN Restaurant Group, on December 10, 2024 and sell it today you would earn a total of  56.00  from holding GEN Restaurant Group, or generate 9.84% return on investment over 90 days.

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

Ziff Davis  vs.  GEN Restaurant Group,

Ziff Davis

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ziff Davis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

GEN Restaurant Group,

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Ziff Davis and GEN Restaurant

The main advantage of trading using opposite Ziff Davis and GEN Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ziff Davis 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 Ziff Davis 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.