Correlation Between Grand Havana and BioForce Nanosciences

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

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

Diversification Opportunities for Grand Havana and BioForce Nanosciences

0.46

Correlation Coefficient

Grand Havana  BioForce Nanosciences

Very weak diversification

The 3 months correlation between Grand and BioForce is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Grand Havana and BioForce Nanosciences Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioForce Nanosciences and Grand Havana 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 Grand Havana are associated (or correlated) with BioForce Nanosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioForce Nanosciences has no effect on the direction of Grand Havana i.e., Grand Havana and BioForce Nanosciences go up and down completely randomly.

Pair Corralation between Grand Havana and BioForce Nanosciences

Given the investment horizon of 90 days Grand Havana is expected to under-perform the BioForce Nanosciences. But the pink sheet apears to be less risky and, when comparing its historical volatility, Grand Havana is 3.02 times less risky than BioForce Nanosciences. The pink sheet trades about -0.04 of its potential returns per unit of risk. The BioForce Nanosciences Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  90.00  in BioForce Nanosciences Holdings on October 5, 2024 and sell it today you would lose (15.00) from holding BioForce Nanosciences Holdings or give up 16.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Grand Havana  vs.  BioForce Nanosciences Holdings

Grand Havana

Risk-Adjusted Performance

3 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grand Havana are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Grand Havana showed solid returns over the last few months and may actually be approaching a breakup point.

BioForce Nanosciences

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BioForce Nanosciences Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, BioForce Nanosciences demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grand Havana and BioForce Nanosciences

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

The idea behind Grand Havana and BioForce Nanosciences 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.