Correlation Between CbdMD and Genesis Healthcare
Can any of the company-specific risk be diversified away by investing in both CbdMD and Genesis 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 CbdMD and Genesis Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between cbdMD Inc and Genesis Healthcare, you can compare the effects of market volatilities on CbdMD and Genesis 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 CbdMD with a short position of Genesis Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of CbdMD and Genesis Healthcare.
Diversification Opportunities for CbdMD and Genesis Healthcare
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CbdMD and Genesis is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding cbdMD Inc and Genesis Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Healthcare and CbdMD 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 cbdMD Inc are associated (or correlated) with Genesis Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Healthcare has no effect on the direction of CbdMD i.e., CbdMD and Genesis Healthcare go up and down completely randomly.
Pair Corralation between CbdMD and Genesis Healthcare
If you would invest 69.00 in cbdMD Inc on August 26, 2024 and sell it today you would earn a total of 1.00 from holding cbdMD Inc or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.95% |
| Values | Daily Returns |
cbdMD Inc vs. Genesis Healthcare
Performance |
| Timeline |
| cbdMD Inc |
| Genesis Healthcare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CbdMD and Genesis Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CbdMD and Genesis Healthcare
The main advantage of trading using opposite CbdMD and Genesis Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CbdMD position performs unexpectedly, Genesis 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 Genesis Healthcare will offset losses from the drop in Genesis Healthcare's long position.The idea behind cbdMD Inc and Genesis Healthcare 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.| Genesis Healthcare vs. Univec Inc | Genesis Healthcare vs. Ethema Health Corp | Genesis Healthcare vs. IMAC Holdings | Genesis Healthcare vs. The Ensign Group |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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