Correlation Between Intercure and Razor Labs

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

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

Diversification Opportunities for Intercure and Razor Labs

0.13

Correlation Coefficient

Intercure  Razor Labs

Average diversification

The 3 months correlation between Intercure and Razor is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Intercure and Razor Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Razor Labs and Intercure 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 Intercure are associated (or correlated) with Razor Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Razor Labs has no effect on the direction of Intercure i.e., Intercure and Razor Labs go up and down completely randomly.

Pair Corralation between Intercure and Razor Labs

Assuming the 90 days trading horizon Intercure is expected to generate 1.07 times more return on investment than Razor Labs. However, Intercure is 1.07 times more volatile than Razor Labs. It trades about 0.09 of its potential returns per unit of risk. Razor Labs is currently generating about -0.02 per unit of risk. If you would invest  47,890  in Intercure on December 2, 2024 and sell it today you would earn a total of  8,110  from holding Intercure or generate 16.93% return on investment over 90 days.

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

Intercure  vs.  Razor Labs

Intercure

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intercure are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Intercure sustained solid returns over the last few months and may actually be approaching a breakup point.

Razor Labs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Razor Labs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Razor Labs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intercure and Razor Labs

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

The idea behind Intercure and Razor Labs 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.