Correlation Between Generic Engineering and Styrenix Performance

Can any of the company-specific risk be diversified away by investing in both Generic Engineering and Styrenix Performance 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 Generic Engineering and Styrenix Performance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Generic Engineering Construction and Styrenix Performance Materials, you can compare the effects of market volatilities on Generic Engineering and Styrenix Performance 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 Generic Engineering with a short position of Styrenix Performance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generic Engineering and Styrenix Performance.

Diversification Opportunities for Generic Engineering and Styrenix Performance

0.9

Correlation Coefficient

Generic Engineering  Styrenix Performance

Almost no diversification

The 3 months correlation between Generic and Styrenix is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Generic Engineering Constructi and Styrenix Performance Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Styrenix Performance and Generic Engineering 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 Generic Engineering Construction are associated (or correlated) with Styrenix Performance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Styrenix Performance has no effect on the direction of Generic Engineering i.e., Generic Engineering and Styrenix Performance go up and down completely randomly.

Pair Corralation between Generic Engineering and Styrenix Performance

Assuming the 90 days trading horizon Generic Engineering Construction is expected to generate 2.16 times more return on investment than Styrenix Performance. However, Generic Engineering is 2.16 times more volatile than Styrenix Performance Materials. It trades about 0.07 of its potential returns per unit of risk. Styrenix Performance Materials is currently generating about 0.09 per unit of risk. If you would invest  3,527  in Generic Engineering Construction on April 23, 2025 and sell it today you would earn a total of  498.00  from holding Generic Engineering Construction or generate 14.12% return on investment over 90 days.

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

Generic Engineering Constructi  vs.  Styrenix Performance Materials

Generic Engineering

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Generic Engineering Construction are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, Generic Engineering sustained solid returns over the last few months and may actually be approaching a breakup point.

Styrenix Performance

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Styrenix Performance Materials are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Styrenix Performance may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Generic Engineering and Styrenix Performance

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

The idea behind Generic Engineering Construction and Styrenix Performance Materials 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.