Correlation Between Roche Holding and Grey Cloak

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

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

Diversification Opportunities for Roche Holding and Grey Cloak

-0.72

Correlation Coefficient

Roche Holding  Grey Cloak

Pay attention - limited upside

The 3 months correlation between Roche and Grey is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Roche Holding Ltd and Grey Cloak Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grey Cloak Tech and Roche Holding 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 Roche Holding Ltd are associated (or correlated) with Grey Cloak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grey Cloak Tech has no effect on the direction of Roche Holding i.e., Roche Holding and Grey Cloak go up and down completely randomly.

Pair Corralation between Roche Holding and Grey Cloak

Assuming the 90 days horizon Roche Holding is expected to generate 9.4 times less return on investment than Grey Cloak. But when comparing it to its historical volatility, Roche Holding Ltd is 11.68 times less risky than Grey Cloak. It trades about 0.05 of its potential returns per unit of risk. Grey Cloak Tech is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  588.00  in Grey Cloak Tech on December 2, 2024 and sell it today you would lose (438.00) from holding Grey Cloak Tech or give up 74.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	87.03%
Values	Daily Returns

Roche Holding Ltd  vs.  Grey Cloak Tech

Roche Holding

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Roche Holding Ltd are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Roche Holding showed solid returns over the last few months and may actually be approaching a breakup point.

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 weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Roche Holding and Grey Cloak

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

The idea behind Roche Holding Ltd and Grey Cloak Tech 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.