Correlation Between Grey Cloak and Benchmark Botanics

Can any of the company-specific risk be diversified away by investing in both Grey Cloak and Benchmark Botanics 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 Grey Cloak and Benchmark Botanics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grey Cloak Tech and Benchmark Botanics, you can compare the effects of market volatilities on Grey Cloak and Benchmark Botanics 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 Grey Cloak with a short position of Benchmark Botanics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grey Cloak and Benchmark Botanics.

Diversification Opportunities for Grey Cloak and Benchmark Botanics

0.35

Correlation Coefficient

Grey Cloak  Benchmark Botanics

Weak diversification

The 3 months correlation between Grey and Benchmark is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Grey Cloak Tech and Benchmark Botanics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Botanics and Grey Cloak 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 Grey Cloak Tech are associated (or correlated) with Benchmark Botanics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Botanics has no effect on the direction of Grey Cloak i.e., Grey Cloak and Benchmark Botanics go up and down completely randomly.

Pair Corralation between Grey Cloak and Benchmark Botanics

Given the investment horizon of 90 days Grey Cloak Tech is expected to generate 0.62 times more return on investment than Benchmark Botanics. However, Grey Cloak Tech is 1.6 times less risky than Benchmark Botanics. It trades about -0.01 of its potential returns per unit of risk. Benchmark Botanics is currently generating about -0.13 per unit of risk. If you would invest  251.00  in Grey Cloak Tech on December 29, 2024 and sell it today you would lose (57.00) from holding Grey Cloak Tech or give up 22.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

Grey Cloak Tech  vs.  Benchmark Botanics

Grey Cloak Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grey Cloak Tech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Grey Cloak is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Benchmark Botanics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Benchmark Botanics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Grey Cloak and Benchmark Botanics

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

The idea behind Grey Cloak Tech and Benchmark Botanics 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.