Correlation Between Onano Industrial and GeneFerm Biotechnology

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

By analyzing existing cross correlation between Onano Industrial Corp and GeneFerm Biotechnology Co, you can compare the effects of market volatilities on Onano Industrial and GeneFerm Biotechnology 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 Onano Industrial with a short position of GeneFerm Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Onano Industrial and GeneFerm Biotechnology.

Diversification Opportunities for Onano Industrial and GeneFerm Biotechnology

-0.29

Correlation Coefficient

Onano Industrial  GeneFerm Biotechnology

Very good diversification

The 3 months correlation between Onano and GeneFerm is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Onano Industrial Corp and GeneFerm Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeneFerm Biotechnology and Onano Industrial 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 Onano Industrial Corp are associated (or correlated) with GeneFerm Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GeneFerm Biotechnology has no effect on the direction of Onano Industrial i.e., Onano Industrial and GeneFerm Biotechnology go up and down completely randomly.

Pair Corralation between Onano Industrial and GeneFerm Biotechnology

Assuming the 90 days trading horizon Onano Industrial Corp is expected to under-perform the GeneFerm Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, Onano Industrial Corp is 1.42 times less risky than GeneFerm Biotechnology. The stock trades about -0.11 of its potential returns per unit of risk. The GeneFerm Biotechnology Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4,725  in GeneFerm Biotechnology Co on December 22, 2024 and sell it today you would earn a total of  815.00  from holding GeneFerm Biotechnology Co or generate 17.25% return on investment over 90 days.

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

Onano Industrial Corp  vs.  GeneFerm Biotechnology Co

Onano Industrial Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Onano Industrial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

GeneFerm Biotechnology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GeneFerm Biotechnology Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, GeneFerm Biotechnology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Onano Industrial and GeneFerm Biotechnology

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

The idea behind Onano Industrial Corp and GeneFerm Biotechnology Co 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.