Correlation Between Gencell and Intercure

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

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

Diversification Opportunities for Gencell and Intercure

0.47

Correlation Coefficient

Gencell  Intercure

Very weak diversification

The 3 months correlation between Gencell and Intercure is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Gencell and Intercure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intercure and Gencell 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 Gencell are associated (or correlated) with Intercure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intercure has no effect on the direction of Gencell i.e., Gencell and Intercure go up and down completely randomly.

Pair Corralation between Gencell and Intercure

Assuming the 90 days trading horizon Gencell is expected to generate 0.78 times more return on investment than Intercure. However, Gencell is 1.28 times less risky than Intercure. It trades about 0.04 of its potential returns per unit of risk. Intercure is currently generating about -0.03 per unit of risk. If you would invest  5,140  in Gencell on September 26, 2024 and sell it today you would earn a total of  240.00  from holding Gencell or generate 4.67% return on investment over 90 days.

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

Gencell  vs.  Intercure

Gencell

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gencell are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Gencell may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Intercure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intercure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Gencell and Intercure

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

The idea behind Gencell and Intercure 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.