Correlation Between Benchmark Botanics and GSRX Industries

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

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

Diversification Opportunities for Benchmark Botanics and GSRX Industries

-1.0

Correlation Coefficient

Benchmark Botanics  GSRX Industries

Pay attention - limited upside

The 3 months correlation between Benchmark and GSRX is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Botanics and GSRX Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GSRX Industries and Benchmark Botanics 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 Benchmark Botanics are associated (or correlated) with GSRX Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GSRX Industries has no effect on the direction of Benchmark Botanics i.e., Benchmark Botanics and GSRX Industries go up and down completely randomly.

Pair Corralation between Benchmark Botanics and GSRX Industries

If you would invest  0.01  in GSRX Industries on September 9, 2024 and sell it today you would earn a total of  0.00  from holding GSRX Industries or generate 0.0% return on investment over 90 days.

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

Benchmark Botanics  vs.  GSRX Industries

Benchmark Botanics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Benchmark Botanics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Benchmark Botanics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

GSRX Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GSRX Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, GSRX Industries is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Benchmark Botanics and GSRX Industries

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

The idea behind Benchmark Botanics and GSRX Industries 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.