Correlation Between Genasys and Codan

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

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

Diversification Opportunities for Genasys and Codan

-0.32

Correlation Coefficient

Genasys  Codan

Very good diversification

The 3 months correlation between Genasys and Codan is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Genasys and Codan Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codan Limited and Genasys 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 Genasys are associated (or correlated) with Codan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Codan Limited has no effect on the direction of Genasys i.e., Genasys and Codan go up and down completely randomly.

Pair Corralation between Genasys and Codan

Given the investment horizon of 90 days Genasys is expected to under-perform the Codan. But the stock apears to be less risky and, when comparing its historical volatility, Genasys is 1.65 times less risky than Codan. The stock trades about -0.04 of its potential returns per unit of risk. The Codan Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  730.00  in Codan Limited on May 11, 2025 and sell it today you would earn a total of  329.00  from holding Codan Limited or generate 45.07% return on investment over 90 days.

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

Genasys  vs.  Codan Limited

Genasys

Risk-Adjusted Performance

Weakest

Over the last 90 days Genasys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Codan Limited

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Codan Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Codan reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genasys and Codan

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

The idea behind Genasys and Codan Limited 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.