Correlation Between B Yair and Gencell

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

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

Diversification Opportunities for B Yair and Gencell

0.45

Correlation Coefficient

B Yair  Gencell

Very weak diversification

The 3 months correlation between BYAR and Gencell is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding B Yair Building and Gencell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gencell and B Yair 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 B Yair Building are associated (or correlated) with Gencell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gencell has no effect on the direction of B Yair i.e., B Yair and Gencell go up and down completely randomly.

Pair Corralation between B Yair and Gencell

Assuming the 90 days trading horizon B Yair Building is expected to generate 1.08 times more return on investment than Gencell. However, B Yair is 1.08 times more volatile than Gencell. It trades about -0.06 of its potential returns per unit of risk. Gencell is currently generating about -0.18 per unit of risk. If you would invest  165,500  in B Yair Building on December 30, 2024 and sell it today you would lose (33,600) from holding B Yair Building or give up 20.3% of portfolio value over 90 days.

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

B Yair Building  vs.  Gencell

B Yair Building

Risk-Adjusted Performance

Very Weak

Over the last 90 days B Yair Building has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Gencell

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gencell has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with B Yair and Gencell

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

The idea behind B Yair Building and Gencell 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.