Correlation Between Genesis Electronics and MERCK Kommanditgesells

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

Diversification Opportunities for Genesis Electronics and MERCK Kommanditgesells

0.0

Correlation Coefficient

Genesis Electronics  MERCK Kommanditgesells

Pay attention - limited upside

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

Pair Corralation between Genesis Electronics and MERCK Kommanditgesells

Given the investment horizon of 90 days Genesis Electronics Group is expected to under-perform the MERCK Kommanditgesells. In addition to that, Genesis Electronics is 5.16 times more volatile than MERCK Kommanditgesellschaft auf. It trades about -0.13 of its total potential returns per unit of risk. MERCK Kommanditgesellschaft auf is currently generating about -0.14 per unit of volatility. If you would invest  17,743  in MERCK Kommanditgesellschaft auf on September 25, 2024 and sell it today you would lose (3,616) from holding MERCK Kommanditgesellschaft auf or give up 20.38% 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.  MERCK Kommanditgesellschaft au

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.

MERCK Kommanditgesells

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MERCK Kommanditgesellschaft auf has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Genesis Electronics and MERCK Kommanditgesells

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

The idea behind Genesis Electronics Group and MERCK Kommanditgesellschaft auf 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.