Correlation Between BSR Real and Genesis Land

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

By analyzing existing cross correlation between BSR Real Estate and Genesis Land Development, you can compare the effects of market volatilities on BSR Real and Genesis Land 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 BSR Real with a short position of Genesis Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of BSR Real and Genesis Land.

Diversification Opportunities for BSR Real and Genesis Land

0.16

Correlation Coefficient

BSR Real  Genesis Land

Average diversification

The 3 months correlation between BSR and Genesis is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding BSR Real Estate and Genesis Land Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Land Development and BSR Real 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 BSR Real Estate are associated (or correlated) with Genesis Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Land Development has no effect on the direction of BSR Real i.e., BSR Real and Genesis Land go up and down completely randomly.

Pair Corralation between BSR Real and Genesis Land

Assuming the 90 days trading horizon BSR Real Estate is expected to generate 0.35 times more return on investment than Genesis Land. However, BSR Real Estate is 2.87 times less risky than Genesis Land. It trades about -0.1 of its potential returns per unit of risk. Genesis Land Development is currently generating about -0.2 per unit of risk. If you would invest  1,807  in BSR Real Estate on September 22, 2024 and sell it today you would lose (43.00) from holding BSR Real Estate or give up 2.38% of portfolio value over 90 days.

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

BSR Real Estate  vs.  Genesis Land Development

BSR Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BSR Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Genesis Land Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genesis Land Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with BSR Real and Genesis Land

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

The idea behind BSR Real Estate and Genesis Land Development 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.