Correlation Between Galway Metals and Gen Digital

Can any of the company-specific risk be diversified away by investing in both Galway Metals and Gen Digital 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 Galway Metals and Gen Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Galway Metals and Gen Digital Contingent, you can compare the effects of market volatilities on Galway Metals and Gen Digital 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 Galway Metals with a short position of Gen Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galway Metals and Gen Digital.

Diversification Opportunities for Galway Metals and Gen Digital

0.27

Correlation Coefficient

Galway Metals  Gen Digital

Modest diversification

The 3 months correlation between Galway and Gen is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Galway Metals and Gen Digital Contingent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gen Digital Contingent and Galway Metals 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 Galway Metals are associated (or correlated) with Gen Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gen Digital Contingent has no effect on the direction of Galway Metals i.e., Galway Metals and Gen Digital go up and down completely randomly.

Pair Corralation between Galway Metals and Gen Digital

Assuming the 90 days horizon Galway Metals is expected to generate 4.08 times less return on investment than Gen Digital. But when comparing it to its historical volatility, Galway Metals is 1.41 times less risky than Gen Digital. It trades about 0.05 of its potential returns per unit of risk. Gen Digital Contingent is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  511.00  in Gen Digital Contingent on May 5, 2025 and sell it today you would earn a total of  293.00  from holding Gen Digital Contingent or generate 57.34% return on investment over 90 days.

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

Galway Metals  vs.  Gen Digital Contingent

Galway Metals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Galway Metals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Galway Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Gen Digital Contingent

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gen Digital Contingent are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Gen Digital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Galway Metals and Gen Digital

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

The idea behind Galway Metals and Gen Digital Contingent 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.