Correlation Between Genomma Lab and C21 Investments

Can any of the company-specific risk be diversified away by investing in both Genomma Lab and C21 Investments 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 Genomma Lab and C21 Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Genomma Lab Internacional and C21 Investments, you can compare the effects of market volatilities on Genomma Lab and C21 Investments 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 Genomma Lab with a short position of C21 Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genomma Lab and C21 Investments.

Diversification Opportunities for Genomma Lab and C21 Investments

-0.6

Correlation Coefficient

Genomma Lab  C21 Investments

Excellent diversification

The 3 months correlation between Genomma and C21 is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Genomma Lab Internacional and C21 Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C21 Investments and Genomma Lab 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 Genomma Lab Internacional are associated (or correlated) with C21 Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C21 Investments has no effect on the direction of Genomma Lab i.e., Genomma Lab and C21 Investments go up and down completely randomly.

Pair Corralation between Genomma Lab and C21 Investments

Assuming the 90 days horizon Genomma Lab Internacional is expected to generate 0.52 times more return on investment than C21 Investments. However, Genomma Lab Internacional is 1.91 times less risky than C21 Investments. It trades about 0.12 of its potential returns per unit of risk. C21 Investments is currently generating about 0.03 per unit of risk. If you would invest  98.00  in Genomma Lab Internacional on September 3, 2024 and sell it today you would earn a total of  29.00  from holding Genomma Lab Internacional or generate 29.59% return on investment over 90 days.

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

Genomma Lab Internacional  vs.  C21 Investments

Genomma Lab Internacional

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Genomma Lab Internacional are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Genomma Lab reported solid returns over the last few months and may actually be approaching a breakup point.

C21 Investments

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in C21 Investments are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, C21 Investments reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genomma Lab and C21 Investments

The main advantage of trading using opposite Genomma Lab and C21 Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genomma Lab position performs unexpectedly, C21 Investments 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 C21 Investments will offset losses from the drop in C21 Investments' long position.

The idea behind Genomma Lab Internacional and C21 Investments 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.