Correlation Between Generation Asia and BioCube

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

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

Diversification Opportunities for Generation Asia and BioCube

0.0

Correlation Coefficient

Generation Asia  BioCube

Pay attention - limited upside

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

Pair Corralation between Generation Asia and BioCube

If you would invest  1,132  in Generation Asia I on October 25, 2024 and sell it today you would earn a total of  8.00  from holding Generation Asia I or generate 0.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	20.63%
Values	Daily Returns

Generation Asia I  vs.  BioCube

Generation Asia I

Risk-Adjusted Performance

0 of 100

Strong

Over the last 90 days Generation Asia I has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Generation Asia is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

BioCube

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Generation Asia and BioCube

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

The idea behind Generation Asia I and BioCube 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.

Check out your portfolio center.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.