Correlation Between Castle Biosciences and Genetron Holdings
Can any of the company-specific risk be diversified away by investing in both Castle Biosciences and Genetron Holdings 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 Castle Biosciences and Genetron Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Castle Biosciences and Genetron Holdings, you can compare the effects of market volatilities on Castle Biosciences and Genetron Holdings 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 Castle Biosciences with a short position of Genetron Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castle Biosciences and Genetron Holdings.
Diversification Opportunities for Castle Biosciences and Genetron Holdings
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Castle and Genetron is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Castle Biosciences and Genetron Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genetron Holdings and Castle Biosciences 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 Castle Biosciences are associated (or correlated) with Genetron Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genetron Holdings has no effect on the direction of Castle Biosciences i.e., Castle Biosciences and Genetron Holdings go up and down completely randomly.
Pair Corralation between Castle Biosciences and Genetron Holdings
Given the investment horizon of 90 days Castle Biosciences is expected to generate 1.59 times more return on investment than Genetron Holdings. However, Castle Biosciences is 1.59 times more volatile than Genetron Holdings. It trades about 0.03 of its potential returns per unit of risk. Genetron Holdings is currently generating about -0.01 per unit of risk. If you would invest 2,441 in Castle Biosciences on August 24, 2024 and sell it today you would earn a total of 540.00 from holding Castle Biosciences or generate 22.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 32.06% |
| Values | Daily Returns |
Castle Biosciences vs. Genetron Holdings
Performance |
| Timeline |
| Castle Biosciences |
| Genetron Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Castle Biosciences and Genetron Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Castle Biosciences and Genetron Holdings
The main advantage of trading using opposite Castle Biosciences and Genetron Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castle Biosciences position performs unexpectedly, Genetron Holdings 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 Genetron Holdings will offset losses from the drop in Genetron Holdings' long position.| Castle Biosciences vs. Caredx Inc | Castle Biosciences vs. Twist Bioscience Corp | Castle Biosciences vs. Biodesix | Castle Biosciences vs. Natera Inc |
| Genetron Holdings vs. Psychemedics | Genetron Holdings vs. Sera Prognostics | Genetron Holdings vs. DarioHealth Corp | Genetron Holdings vs. Biodesix |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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