Correlation Between Genesis Growth and Ventana Biotech

Can any of the company-specific risk be diversified away by investing in both Genesis Growth and Ventana Biotech 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 Genesis Growth and Ventana Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Genesis Growth Tech and Ventana Biotech, you can compare the effects of market volatilities on Genesis Growth and Ventana Biotech 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 Genesis Growth with a short position of Ventana Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genesis Growth and Ventana Biotech.

Diversification Opportunities for Genesis Growth and Ventana Biotech

0.48

Correlation Coefficient

Genesis Growth  Ventana Biotech

Very weak diversification

The 3 months correlation between Genesis and Ventana is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Genesis Growth Tech and Ventana Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ventana Biotech and Genesis Growth 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 Genesis Growth Tech are associated (or correlated) with Ventana Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ventana Biotech has no effect on the direction of Genesis Growth i.e., Genesis Growth and Ventana Biotech go up and down completely randomly.

Pair Corralation between Genesis Growth and Ventana Biotech

If you would invest  0.21  in Ventana Biotech on September 15, 2024 and sell it today you would lose (0.07) from holding Ventana Biotech or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.54%
Values	Daily Returns

Genesis Growth Tech  vs.  Ventana Biotech

Genesis Growth Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genesis Growth Tech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Genesis Growth is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Ventana Biotech

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ventana Biotech are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ventana Biotech sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genesis Growth and Ventana Biotech

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

The idea behind Genesis Growth Tech and Ventana Biotech 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.