Correlation Between GH Research and Cybin

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

By analyzing existing cross correlation between GH Research PLC and Cybin Inc, you can compare the effects of market volatilities on GH Research and Cybin 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 GH Research with a short position of Cybin. Check out your portfolio center. Please also check ongoing floating volatility patterns of GH Research and Cybin.

Diversification Opportunities for GH Research and Cybin

0.48

Correlation Coefficient

GH Research  Cybin

Very weak diversification

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

Pair Corralation between GH Research and Cybin

Given the investment horizon of 90 days GH Research is expected to generate 16.17 times less return on investment than Cybin. But when comparing it to its historical volatility, GH Research PLC is 1.08 times less risky than Cybin. It trades about 0.01 of its potential returns per unit of risk. Cybin Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  760.00  in Cybin Inc on September 17, 2024 and sell it today you would earn a total of  218.00  from holding Cybin Inc or generate 28.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

GH Research PLC  vs.  Cybin Inc

GH Research PLC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Cybin Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cybin Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady fundamental drivers, Cybin displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GH Research and Cybin

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

The idea behind GH Research PLC and Cybin Inc 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.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.