Correlation Between Lancaster Colony and Genesis Electronics

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

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

Diversification Opportunities for Lancaster Colony and Genesis Electronics

0.0

Correlation Coefficient

Lancaster Colony  Genesis Electronics

Pay attention - limited upside

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

Pair Corralation between Lancaster Colony and Genesis Electronics

Given the investment horizon of 90 days Lancaster Colony is expected to generate 27.36 times less return on investment than Genesis Electronics. But when comparing it to its historical volatility, Lancaster Colony is 7.54 times less risky than Genesis Electronics. It trades about 0.01 of its potential returns per unit of risk. Genesis Electronics Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  0.14  in Genesis Electronics Group on September 4, 2024 and sell it today you would lose (0.13) from holding Genesis Electronics Group or give up 92.86% of portfolio value over 90 days.

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

Lancaster Colony  vs.  Genesis Electronics Group

Lancaster Colony

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lancaster Colony are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Lancaster Colony may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Lancaster Colony and Genesis Electronics

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

The idea behind Lancaster Colony and Genesis Electronics Group 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.