Correlation Between Genelux Common and Biostem Technologies

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

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

Diversification Opportunities for Genelux Common and Biostem Technologies

0.59

Correlation Coefficient

Genelux Common  Biostem Technologies

Very weak diversification

The 3 months correlation between Genelux and Biostem is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Genelux Common and Biostem Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biostem Technologies and Genelux Common 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 Genelux Common are associated (or correlated) with Biostem Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biostem Technologies has no effect on the direction of Genelux Common i.e., Genelux Common and Biostem Technologies go up and down completely randomly.

Pair Corralation between Genelux Common and Biostem Technologies

Given the investment horizon of 90 days Genelux Common is expected to generate 6.35 times less return on investment than Biostem Technologies. In addition to that, Genelux Common is 1.11 times more volatile than Biostem Technologies. It trades about 0.01 of its total potential returns per unit of risk. Biostem Technologies is currently generating about 0.07 per unit of volatility. If you would invest  930.00  in Biostem Technologies on September 24, 2024 and sell it today you would earn a total of  514.00  from holding Biostem Technologies or generate 55.27% return on investment over 90 days.

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

Genelux Common  vs.  Biostem Technologies

Genelux Common

Risk-Adjusted Performance

3 of 100

Insignificant

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

Biostem Technologies

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Biostem Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Biostem Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genelux Common and Biostem Technologies

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

The idea behind Genelux Common and Biostem Technologies 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.