Correlation Between Genomma Lab and Green Cures

Can any of the company-specific risk be diversified away by investing in both Genomma Lab and Green Cures 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 Green Cures 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 Green Cures Botanical, you can compare the effects of market volatilities on Genomma Lab and Green Cures 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 Green Cures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genomma Lab and Green Cures.

Diversification Opportunities for Genomma Lab and Green Cures

0.01

Correlation Coefficient

Genomma Lab  Green Cures

Significant diversification

The 3 months correlation between Genomma and Green is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Genomma Lab Internacional and Green Cures Botanical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Cures Botanical 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 Green Cures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Cures Botanical has no effect on the direction of Genomma Lab i.e., Genomma Lab and Green Cures go up and down completely randomly.

Pair Corralation between Genomma Lab and Green Cures

Assuming the 90 days horizon Genomma Lab is expected to generate 17.09 times less return on investment than Green Cures. But when comparing it to its historical volatility, Genomma Lab Internacional is 11.19 times less risky than Green Cures. It trades about 0.12 of its potential returns per unit of risk. Green Cures Botanical is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Green Cures Botanical on August 31, 2024 and sell it today you would lose (0.01) from holding Green Cures Botanical or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Genomma Lab Internacional  vs.  Green Cures Botanical

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.

Green Cures Botanical

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Green Cures Botanical are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Green Cures unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genomma Lab and Green Cures

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

The idea behind Genomma Lab Internacional and Green Cures Botanical 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.