Correlation Between Genel Energy and Beyond Air

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

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

Diversification Opportunities for Genel Energy and Beyond Air

0.34

Correlation Coefficient

Genel Energy  Beyond Air

Weak diversification

The 3 months correlation between Genel and Beyond is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Genel Energy plc and Beyond Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Air and Genel 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 Genel Energy plc are associated (or correlated) with Beyond Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Air has no effect on the direction of Genel Energy i.e., Genel Energy and Beyond Air go up and down completely randomly.

Pair Corralation between Genel Energy and Beyond Air

Assuming the 90 days horizon Genel Energy plc is expected to under-perform the Beyond Air. In addition to that, Genel Energy is 1.35 times more volatile than Beyond Air. It trades about -0.22 of its total potential returns per unit of risk. Beyond Air is currently generating about -0.11 per unit of volatility. If you would invest  42.00  in Beyond Air on June 29, 2024 and sell it today you would lose (4.10) from holding Beyond Air or give up 9.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Genel Energy plc  vs.  Beyond Air

Genel Energy plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genel Energy plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Beyond Air

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beyond Air has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in October 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Genel Energy and Beyond Air

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

The idea behind Genel Energy plc and Beyond Air 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.