Correlation Between Genesis Electronics and Lobe Sciences

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

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

Diversification Opportunities for Genesis Electronics and Lobe Sciences

0.0

Correlation Coefficient

Genesis Electronics  Lobe Sciences

Pay attention - limited upside

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

Pair Corralation between Genesis Electronics and Lobe Sciences

If you would invest  1.29  in Lobe Sciences on October 1, 2024 and sell it today you would lose (1.13) from holding Lobe Sciences or give up 87.6% of portfolio value over 90 days.

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

Genesis Electronics Group  vs.  Lobe Sciences

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 fairly strong technical and fundamental indicators, Genesis Electronics is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Lobe Sciences

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lobe Sciences are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, Lobe Sciences reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genesis Electronics and Lobe Sciences

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

The idea behind Genesis Electronics Group and Lobe Sciences 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.

Check out your portfolio center.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.