Correlation Between Genesis Electronics and Medipharm Labs

Can any of the company-specific risk be diversified away by investing in both Genesis Electronics and Medipharm Labs 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 Medipharm Labs 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 Medipharm Labs Corp, you can compare the effects of market volatilities on Genesis Electronics and Medipharm Labs 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 Medipharm Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genesis Electronics and Medipharm Labs.

Diversification Opportunities for Genesis Electronics and Medipharm Labs

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Correlation Coefficient

Genesis Electronics  Medipharm Labs

Pay attention - limited upside

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

Pair Corralation between Genesis Electronics and Medipharm Labs

Given the investment horizon of 90 days Genesis Electronics Group is expected to under-perform the Medipharm Labs. In addition to that, Genesis Electronics is 2.87 times more volatile than Medipharm Labs Corp. It trades about -0.06 of its total potential returns per unit of risk. Medipharm Labs Corp is currently generating about 0.01 per unit of volatility. If you would invest  4.90  in Medipharm Labs Corp on September 25, 2024 and sell it today you would lose (0.68) from holding Medipharm Labs Corp or give up 13.88% 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.  Medipharm Labs Corp

Genesis Electronics

Risk-Adjusted Performance

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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.

Medipharm Labs Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medipharm Labs Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Genesis Electronics and Medipharm Labs

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

The idea behind Genesis Electronics Group and Medipharm Labs Corp 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.