Correlation Between GENESIS TECHNOLOGY and DOW

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Can any of the company-specific risk be diversified away by investing in both GENESIS TECHNOLOGY and DOW 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 TECHNOLOGY and DOW into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GENESIS TECHNOLOGY INC and DOW, you can compare the effects of market volatilities on GENESIS TECHNOLOGY and DOW 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 TECHNOLOGY with a short position of DOW. Check out your portfolio center. Please also check ongoing floating volatility patterns of GENESIS TECHNOLOGY and DOW.

Diversification Opportunities for GENESIS TECHNOLOGY and DOW

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between GENESIS and DOW is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding GENESIS TECHNOLOGY INC and DOW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DOW and GENESIS TECHNOLOGY 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 TECHNOLOGY INC are associated (or correlated) with DOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOW has no effect on the direction of GENESIS TECHNOLOGY i.e., GENESIS TECHNOLOGY and DOW go up and down completely randomly.
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Pair Corralation between GENESIS TECHNOLOGY and DOW

Assuming the 90 days trading horizon GENESIS TECHNOLOGY INC is expected to generate 5.41 times more return on investment than DOW. However, GENESIS TECHNOLOGY is 5.41 times more volatile than DOW. It trades about 0.04 of its potential returns per unit of risk. DOW is currently generating about 0.02 per unit of risk. If you would invest  4,129  in GENESIS TECHNOLOGY INC on May 20, 2022 and sell it today you would earn a total of  1,901  from holding GENESIS TECHNOLOGY INC or generate 46.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.2%
ValuesDaily Returns

GENESIS TECHNOLOGY INC  vs.  DOW

 Performance (%) 
       Timeline  

GENESIS TECHNOLOGY and DOW Volatility Contrast

   Predicted Return Density   
       Returns  

GENESIS TECHNOLOGY INC

Pair trading matchups for GENESIS TECHNOLOGY

Schwab US vs. GENESIS TECHNOLOGY
SP 500 vs. GENESIS TECHNOLOGY
Paypal Holdings vs. GENESIS TECHNOLOGY
Vmware vs. GENESIS TECHNOLOGY
Alps Clean vs. GENESIS TECHNOLOGY
Salesforce vs. GENESIS TECHNOLOGY
Ford vs. GENESIS TECHNOLOGY
Global Clean vs. GENESIS TECHNOLOGY
Alibaba Group vs. GENESIS TECHNOLOGY
Citigroup vs. GENESIS TECHNOLOGY
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against GENESIS TECHNOLOGY as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. GENESIS TECHNOLOGY's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, GENESIS TECHNOLOGY's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to GENESIS TECHNOLOGY INC.

DOW

Pair trading matchups for DOW

Citigroup vs. DOW
Vmware vs. DOW
JP Morgan vs. DOW
SPDR SP vs. DOW
Paypal Holdings vs. DOW
GM vs. DOW
Salesforce vs. DOW
Walker Dunlop vs. DOW
Twitter vs. DOW
Vici Properties vs. DOW
Ford vs. DOW
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against DOW as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. DOW's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, DOW's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to DOW.

Pair Trading with GENESIS TECHNOLOGY and DOW

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

GENESIS TECHNOLOGY INC

Pair trading matchups for GENESIS TECHNOLOGY

Alibaba Group vs. GENESIS TECHNOLOGY
Walker Dunlop vs. GENESIS TECHNOLOGY
Global Clean vs. GENESIS TECHNOLOGY
SPDR SP vs. GENESIS TECHNOLOGY
GM vs. GENESIS TECHNOLOGY
Schwab US vs. GENESIS TECHNOLOGY
Alps Clean vs. GENESIS TECHNOLOGY
Visa vs. GENESIS TECHNOLOGY
Citigroup vs. GENESIS TECHNOLOGY
Salesforce vs. GENESIS TECHNOLOGY
Vmware vs. GENESIS TECHNOLOGY
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against GENESIS TECHNOLOGY as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. GENESIS TECHNOLOGY's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, GENESIS TECHNOLOGY's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to GENESIS TECHNOLOGY INC.
The idea behind GENESIS TECHNOLOGY INC and DOW 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.

DOW

Pair trading matchups for DOW

Visa vs. DOW
Salesforce vs. DOW
Ford vs. DOW
GM vs. DOW
SP 500 vs. DOW
Global Clean vs. DOW
Alibaba Group vs. DOW
Walker Dunlop vs. DOW
Citigroup vs. DOW
Vici Properties vs. DOW
SPDR SP vs. DOW
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against DOW as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. DOW's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, DOW's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to DOW.
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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