Correlation Between Genus Power and Shenzhen Genvict

Can any of the company-specific risk be diversified away by investing in both Genus Power and Shenzhen Genvict 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 Genus Power and Shenzhen Genvict into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Genus Power Infrastructures and Shenzhen Genvict Technologies, you can compare the effects of market volatilities on Genus Power and Shenzhen Genvict 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 Genus Power with a short position of Shenzhen Genvict. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genus Power and Shenzhen Genvict.

Diversification Opportunities for Genus Power and Shenzhen Genvict

0.09

Correlation Coefficient

Genus Power  Shenzhen Genvict

Significant diversification

The 3 months correlation between Genus and Shenzhen is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Genus Power Infrastructures and Shenzhen Genvict Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Genvict Tec and Genus Power 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 Genus Power Infrastructures are associated (or correlated) with Shenzhen Genvict. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Genvict Tec has no effect on the direction of Genus Power i.e., Genus Power and Shenzhen Genvict go up and down completely randomly.

Pair Corralation between Genus Power and Shenzhen Genvict

Assuming the 90 days trading horizon Genus Power Infrastructures is expected to under-perform the Shenzhen Genvict. But the stock apears to be less risky and, when comparing its historical volatility, Genus Power Infrastructures is 1.69 times less risky than Shenzhen Genvict. The stock trades about -0.04 of its potential returns per unit of risk. The Shenzhen Genvict Technologies is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,280  in Shenzhen Genvict Technologies on September 23, 2024 and sell it today you would earn a total of  673.00  from holding Shenzhen Genvict Technologies or generate 29.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Genus Power Infrastructures  vs.  Shenzhen Genvict Technologies

Genus Power Infrastr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genus Power Infrastructures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Genus Power is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Shenzhen Genvict Tec

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen Genvict Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenzhen Genvict sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genus Power and Shenzhen Genvict

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

The idea behind Genus Power Infrastructures and Shenzhen Genvict Technologies 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.