Correlation Between AUREA SA and Genertec Universal
Can any of the company-specific risk be diversified away by investing in both AUREA SA and Genertec Universal 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 AUREA SA and Genertec Universal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUREA SA INH and Genertec Universal Medical, you can compare the effects of market volatilities on AUREA SA and Genertec Universal 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 AUREA SA with a short position of Genertec Universal. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUREA SA and Genertec Universal.
Diversification Opportunities for AUREA SA and Genertec Universal
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AUREA and Genertec is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding AUREA SA INH and Genertec Universal Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genertec Universal and AUREA SA 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 AUREA SA INH are associated (or correlated) with Genertec Universal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genertec Universal has no effect on the direction of AUREA SA i.e., AUREA SA and Genertec Universal go up and down completely randomly.
Pair Corralation between AUREA SA and Genertec Universal
Assuming the 90 days horizon AUREA SA is expected to generate 2.27 times less return on investment than Genertec Universal. But when comparing it to its historical volatility, AUREA SA INH is 1.05 times less risky than Genertec Universal. It trades about 0.11 of its potential returns per unit of risk. Genertec Universal Medical is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 50.00 in Genertec Universal Medical on April 21, 2025 and sell it today you would earn a total of 16.00 from holding Genertec Universal Medical or generate 32.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
AUREA SA INH vs. Genertec Universal Medical
Performance |
Timeline |
AUREA SA INH |
Genertec Universal |
AUREA SA and Genertec Universal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AUREA SA and Genertec Universal
The main advantage of trading using opposite AUREA SA and Genertec Universal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUREA SA position performs unexpectedly, Genertec Universal 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 Genertec Universal will offset losses from the drop in Genertec Universal's long position.AUREA SA vs. UNIVERSAL DISPLAY | AUREA SA vs. PLAYTIKA HOLDING DL 01 | AUREA SA vs. JD SPORTS FASH | AUREA SA vs. MELIA HOTELS |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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