Correlation Between Gen Digital and Science Technology

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

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

Diversification Opportunities for Gen Digital and Science Technology

0.42

Correlation Coefficient

Gen Digital  Science Technology

Very weak diversification

The 3 months correlation between Gen and Science is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Gen Digital Contingent and Science Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Science Technology and Gen Digital 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 Gen Digital Contingent are associated (or correlated) with Science Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Science Technology has no effect on the direction of Gen Digital i.e., Gen Digital and Science Technology go up and down completely randomly.

Pair Corralation between Gen Digital and Science Technology

Assuming the 90 days horizon Gen Digital Contingent is expected to generate 6.01 times more return on investment than Science Technology. However, Gen Digital is 6.01 times more volatile than Science Technology Fund. It trades about 0.18 of its potential returns per unit of risk. Science Technology Fund is currently generating about 0.36 per unit of risk. If you would invest  525.00  in Gen Digital Contingent on April 30, 2025 and sell it today you would earn a total of  430.00  from holding Gen Digital Contingent or generate 81.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Gen Digital Contingent  vs.  Science Technology Fund

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 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Gen Digital reported solid returns over the last few months and may actually be approaching a breakup point.

Science Technology

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Science Technology Fund are ranked lower than 28 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Science Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gen Digital and Science Technology

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

The idea behind Gen Digital Contingent and Science Technology Fund 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.