Correlation Between Genovate Biotechnology and CHC Healthcare
Can any of the company-specific risk be diversified away by investing in both Genovate Biotechnology and CHC Healthcare 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 Genovate Biotechnology and CHC Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genovate Biotechnology Co and CHC Healthcare Group, you can compare the effects of market volatilities on Genovate Biotechnology and CHC Healthcare 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 Genovate Biotechnology with a short position of CHC Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genovate Biotechnology and CHC Healthcare.
Diversification Opportunities for Genovate Biotechnology and CHC Healthcare
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Genovate and CHC is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Genovate Biotechnology Co and CHC Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHC Healthcare Group and Genovate Biotechnology 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 Genovate Biotechnology Co are associated (or correlated) with CHC Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHC Healthcare Group has no effect on the direction of Genovate Biotechnology i.e., Genovate Biotechnology and CHC Healthcare go up and down completely randomly.
Pair Corralation between Genovate Biotechnology and CHC Healthcare
Assuming the 90 days trading horizon Genovate Biotechnology Co is expected to generate 3.26 times more return on investment than CHC Healthcare. However, Genovate Biotechnology is 3.26 times more volatile than CHC Healthcare Group. It trades about 0.01 of its potential returns per unit of risk. CHC Healthcare Group is currently generating about -0.05 per unit of risk. If you would invest 2,896 in Genovate Biotechnology Co on September 2, 2024 and sell it today you would lose (711.00) from holding Genovate Biotechnology Co or give up 24.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genovate Biotechnology Co vs. CHC Healthcare Group
Performance |
| Timeline |
| Genovate Biotechnology |
| CHC Healthcare Group |
Genovate Biotechnology and CHC Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genovate Biotechnology and CHC Healthcare
The main advantage of trading using opposite Genovate Biotechnology and CHC Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genovate Biotechnology position performs unexpectedly, CHC Healthcare 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 CHC Healthcare will offset losses from the drop in CHC Healthcare's long position.| Genovate Biotechnology vs. Johnson Health Tech | Genovate Biotechnology vs. Arbor Technology | Genovate Biotechnology vs. Asmedia Technology | Genovate Biotechnology vs. Phytohealth Corp |
| CHC Healthcare vs. Phytohealth Corp | CHC Healthcare vs. GenMont Biotech | CHC Healthcare vs. Hung Sheng Construction | CHC Healthcare vs. De Licacy Industrial |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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