Correlation Between Genie Energy and Via Renewables

Can any of the company-specific risk be diversified away by investing in both Genie Energy and Via Renewables 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 Genie Energy and Via Renewables into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Genie Energy and Via Renewables, you can compare the effects of market volatilities on Genie Energy and Via Renewables 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 Genie Energy with a short position of Via Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genie Energy and Via Renewables.

Diversification Opportunities for Genie Energy and Via Renewables

-0.51

Correlation Coefficient

Genie Energy  Via Renewables

Excellent diversification

The 3 months correlation between Genie and Via is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Genie Energy and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables and Genie Energy 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 Genie Energy are associated (or correlated) with Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of Genie Energy i.e., Genie Energy and Via Renewables go up and down completely randomly.

Pair Corralation between Genie Energy and Via Renewables

Considering the 90-day investment horizon Genie Energy is expected to generate 0.97 times more return on investment than Via Renewables. However, Genie Energy is 1.03 times less risky than Via Renewables. It trades about 0.06 of its potential returns per unit of risk. Via Renewables is currently generating about 0.03 per unit of risk. If you would invest  897.00  in Genie Energy on June 13, 2024 and sell it today you would earn a total of  787.00  from holding Genie Energy or generate 87.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Genie Energy  vs.  Via Renewables

Genie Energy

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Genie Energy are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Genie Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Via Renewables

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Via Renewables has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Via Renewables is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Genie Energy and Via Renewables

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

The idea behind Genie Energy and Via Renewables 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.