Correlation Between Genomma Lab and Procyon

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

Diversification Opportunities for Genomma Lab and Procyon

-0.03

Correlation Coefficient

Genomma Lab  Procyon

Good diversification

The 3 months correlation between Genomma and Procyon is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Genomma Lab Internacional and Procyon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procyon 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 Procyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procyon has no effect on the direction of Genomma Lab i.e., Genomma Lab and Procyon go up and down completely randomly.

Pair Corralation between Genomma Lab and Procyon

Assuming the 90 days horizon Genomma Lab Internacional is expected to generate 8.3 times more return on investment than Procyon. However, Genomma Lab is 8.3 times more volatile than Procyon. It trades about 0.13 of its potential returns per unit of risk. Procyon is currently generating about 0.02 per unit of risk. If you would invest  84.00  in Genomma Lab Internacional on October 7, 2024 and sell it today you would earn a total of  43.00  from holding Genomma Lab Internacional or generate 51.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	57.26%
Values	Daily Returns

Genomma Lab Internacional  vs.  Procyon

Genomma Lab Internacional

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Genomma Lab Internacional has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak essential indicators, Genomma Lab reported solid returns over the last few months and may actually be approaching a breakup point.

Procyon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Procyon has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Genomma Lab and Procyon

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

The idea behind Genomma Lab Internacional and Procyon 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.