Correlation Between Automotive Properties and Genesis Land

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

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

Diversification Opportunities for Automotive Properties and Genesis Land

-0.5

Correlation Coefficient

Automotive Properties  Genesis Land

Very good diversification

The 3 months correlation between Automotive and Genesis is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Automotive Properties Real 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 Automotive Properties 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 Automotive Properties Real 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 Automotive Properties i.e., Automotive Properties and Genesis Land go up and down completely randomly.

Pair Corralation between Automotive Properties and Genesis Land

Assuming the 90 days trading horizon Automotive Properties Real is expected to under-perform the Genesis Land. But the stock apears to be less risky and, when comparing its historical volatility, Automotive Properties Real is 2.01 times less risky than Genesis Land. The stock trades about -0.23 of its potential returns per unit of risk. The Genesis Land Development is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  272.00  in Genesis Land Development on January 28, 2024 and sell it today you would earn a total of  40.00  from holding Genesis Land Development or generate 14.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Automotive Properties Real  vs.  Genesis Land Development

Automotive Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Automotive Properties Real has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic 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

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Genesis Land Development are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Genesis Land displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Automotive Properties and Genesis Land

The main advantage of trading using opposite Automotive Properties and Genesis Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automotive Properties 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 Automotive Properties Real 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.