Correlation Between Matricelf and Gencell

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

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

Diversification Opportunities for Matricelf and Gencell

0.35

Correlation Coefficient

Matricelf  Gencell

Weak diversification

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

Pair Corralation between Matricelf and Gencell

Assuming the 90 days trading horizon Matricelf is expected to under-perform the Gencell. But the stock apears to be less risky and, when comparing its historical volatility, Matricelf is 1.99 times less risky than Gencell. The stock trades about -0.07 of its potential returns per unit of risk. The Gencell is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  5,070  in Gencell on December 2, 2024 and sell it today you would lose (560.00) from holding Gencell or give up 11.05% of portfolio value over 90 days.

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

Matricelf  vs.  Gencell

Matricelf

Risk-Adjusted Performance

Very Weak

Over the last 90 days Matricelf has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Gencell

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Matricelf and Gencell

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

The idea behind Matricelf and Gencell 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.