Correlation Between Coda Octopus and Genesis Technology

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

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

Diversification Opportunities for Coda Octopus and Genesis Technology

0.49

Correlation Coefficient

Coda Octopus  Genesis Technology

Very weak diversification

The 3 months correlation between Coda and Genesis is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Coda Octopus Group and Genesis Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Technology and Coda Octopus 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 Coda Octopus Group are associated (or correlated) with Genesis Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Technology has no effect on the direction of Coda Octopus i.e., Coda Octopus and Genesis Technology go up and down completely randomly.

Pair Corralation between Coda Octopus and Genesis Technology

Given the investment horizon of 90 days Coda Octopus Group is expected to generate 5.38 times more return on investment than Genesis Technology. However, Coda Octopus is 5.38 times more volatile than Genesis Technology. It trades about 0.3 of its potential returns per unit of risk. Genesis Technology is currently generating about 0.38 per unit of risk. If you would invest  572.00  in Coda Octopus Group on January 26, 2024 and sell it today you would earn a total of  118.00  from holding Coda Octopus Group or generate 20.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Coda Octopus Group  vs.  Genesis Technology

Coda Octopus Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Coda Octopus Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental indicators, Coda Octopus sustained solid returns over the last few months and may actually be approaching a breakup point.

Genesis Technology

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Genesis Technology are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Genesis Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coda Octopus and Genesis Technology

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

The idea behind Coda Octopus Group and Genesis Technology 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.

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 the Equity Valuation module to check real value of public entities based on technical and fundamental data.