Correlation Between BC Bud and Genomma Lab
Can any of the company-specific risk be diversified away by investing in both BC Bud and Genomma Lab 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 BC Bud and Genomma Lab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The BC Bud and Genomma Lab Internacional, you can compare the effects of market volatilities on BC Bud and Genomma Lab 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 BC Bud with a short position of Genomma Lab. Check out your portfolio center. Please also check ongoing floating volatility patterns of BC Bud and Genomma Lab.
Diversification Opportunities for BC Bud and Genomma Lab
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BCBCF and Genomma is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding The BC Bud and Genomma Lab Internacional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genomma Lab Internacional and BC Bud 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 The BC Bud are associated (or correlated) with Genomma Lab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genomma Lab Internacional has no effect on the direction of BC Bud i.e., BC Bud and Genomma Lab go up and down completely randomly.
Pair Corralation between BC Bud and Genomma Lab
Assuming the 90 days horizon The BC Bud is expected to generate 36.99 times more return on investment than Genomma Lab. However, BC Bud is 36.99 times more volatile than Genomma Lab Internacional. It trades about 0.3 of its potential returns per unit of risk. Genomma Lab Internacional is currently generating about 0.21 per unit of risk. If you would invest 0.30 in The BC Bud on September 1, 2024 and sell it today you would earn a total of 4.25 from holding The BC Bud or generate 1416.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The BC Bud vs. Genomma Lab Internacional
Performance |
| Timeline |
| BC Bud |
| Genomma Lab Internacional |
BC Bud and Genomma Lab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BC Bud and Genomma Lab
The main advantage of trading using opposite BC Bud and Genomma Lab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BC Bud position performs unexpectedly, Genomma Lab 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 Genomma Lab will offset losses from the drop in Genomma Lab's long position.The idea behind The BC Bud and Genomma Lab Internacional 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.| Genomma Lab vs. Speakeasy Cannabis Club | Genomma Lab vs. City View Green | Genomma Lab vs. Benchmark Botanics | Genomma Lab vs. Hypera SA |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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