Correlation Between Castle Biosciences and Genetron Holdings

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

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

Diversification Opportunities for Castle Biosciences and Genetron Holdings

0.0

Correlation Coefficient

Castle Biosciences  Genetron Holdings

Pay attention - limited upside

The 3 months correlation between Castle and Genetron is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Castle Biosciences and Genetron Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genetron Holdings and Castle Biosciences 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 Castle Biosciences are associated (or correlated) with Genetron Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genetron Holdings has no effect on the direction of Castle Biosciences i.e., Castle Biosciences and Genetron Holdings go up and down completely randomly.

Pair Corralation between Castle Biosciences and Genetron Holdings

If you would invest (100.00) in Genetron Holdings on November 28, 2024 and sell it today you would earn a total of  100.00  from holding Genetron Holdings or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Castle Biosciences  vs.  Genetron Holdings

Castle Biosciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Castle Biosciences 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 quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Genetron Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Genetron Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Genetron Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Castle Biosciences and Genetron Holdings

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

The idea behind Castle Biosciences and Genetron Holdings 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.