Correlation Between GB Sciences and Biostage

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

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

Diversification Opportunities for GB Sciences and Biostage

0.0

Correlation Coefficient

GB Sciences  Biostage

Pay attention - limited upside

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

Pair Corralation between GB Sciences and Biostage

If you would invest  0.42  in GB Sciences on December 27, 2024 and sell it today you would lose (0.39) from holding GB Sciences or give up 92.86% of portfolio value over 90 days.

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

GB Sciences  vs.  Biostage

GB Sciences

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GB Sciences are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile essential indicators, GB Sciences showed solid returns over the last few months and may actually be approaching a breakup point.

Biostage

Risk-Adjusted Performance

Very Weak

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

Pair Trading with GB Sciences and Biostage

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

The idea behind GB Sciences and Biostage 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.