Correlation Between Genius and BuzzFeed

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

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

Diversification Opportunities for Genius and BuzzFeed

0.42

Correlation Coefficient

Genius  BuzzFeed

Very weak diversification

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

Pair Corralation between Genius and BuzzFeed

Considering the 90-day investment horizon Genius Group is expected to generate 2.59 times more return on investment than BuzzFeed. However, Genius is 2.59 times more volatile than BuzzFeed. It trades about 0.18 of its potential returns per unit of risk. BuzzFeed is currently generating about 0.04 per unit of risk. If you would invest  33.00  in Genius Group on May 6, 2025 and sell it today you would earn a total of  55.00  from holding Genius Group or generate 166.67% return on investment over 90 days.

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

Genius Group  vs.  BuzzFeed

Genius Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Genius Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Genius unveiled solid returns over the last few months and may actually be approaching a breakup point.

BuzzFeed

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BuzzFeed are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, BuzzFeed exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genius and BuzzFeed

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

The idea behind Genius Group and BuzzFeed 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.