Correlation Between BC Bud and Genesis Electronics

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

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

Diversification Opportunities for BC Bud and Genesis Electronics

0.0

Correlation Coefficient

BC Bud  Genesis Electronics

Pay attention - limited upside

The 3 months correlation between BCBCF and Genesis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The BC Bud and Genesis Electronics Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Electronics and BC Bud 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 The BC Bud are associated (or correlated) with Genesis Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Electronics has no effect on the direction of BC Bud i.e., BC Bud and Genesis Electronics go up and down completely randomly.

Pair Corralation between BC Bud and Genesis Electronics

Assuming the 90 days horizon The BC Bud is expected to generate 4.64 times more return on investment than Genesis Electronics. However, BC Bud is 4.64 times more volatile than Genesis Electronics Group. It trades about 0.18 of its potential returns per unit of risk. Genesis Electronics Group is currently generating about -0.13 per unit of risk. If you would invest  0.30  in The BC Bud on September 25, 2024 and sell it today you would earn a total of  6.33  from holding The BC Bud or generate 2110.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

The BC Bud  vs.  Genesis Electronics Group

BC Bud

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The BC Bud are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent fundamental indicators, BC Bud reported solid returns over the last few months and may actually be approaching a breakup point.

Genesis Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genesis Electronics Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with BC Bud and Genesis Electronics

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

The idea behind The BC Bud and Genesis Electronics 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.