Correlation Between Numinus Wellness and Cybin

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

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

Diversification Opportunities for Numinus Wellness and Cybin

0.39

Correlation Coefficient

Numinus Wellness  Cybin

Weak diversification

The 3 months correlation between Numinus and Cybin is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Numinus Wellness and Cybin Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cybin Inc and Numinus Wellness 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 Numinus Wellness are associated (or correlated) with Cybin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cybin Inc has no effect on the direction of Numinus Wellness i.e., Numinus Wellness and Cybin go up and down completely randomly.

Pair Corralation between Numinus Wellness and Cybin

Assuming the 90 days horizon Numinus Wellness is expected to under-perform the Cybin. In addition to that, Numinus Wellness is 2.76 times more volatile than Cybin Inc. It trades about -0.26 of its total potential returns per unit of risk. Cybin Inc is currently generating about -0.2 per unit of volatility. If you would invest  1,064  in Cybin Inc on September 25, 2024 and sell it today you would lose (114.00) from holding Cybin Inc or give up 10.71% of portfolio value over 90 days.

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

Numinus Wellness  vs.  Cybin Inc

Numinus Wellness

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Numinus Wellness are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating forward indicators, Numinus Wellness reported solid returns over the last few months and may actually be approaching a breakup point.

Cybin Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cybin Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, Cybin is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Numinus Wellness and Cybin

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

The idea behind Numinus Wellness and Cybin Inc 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.