Correlation Between Grey Cloak and BellRock Brands

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

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

Diversification Opportunities for Grey Cloak and BellRock Brands

0.0

Correlation Coefficient

Grey Cloak  BellRock Brands

Pay attention - limited upside

The 3 months correlation between Grey and BellRock is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Grey Cloak Tech and BellRock Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BellRock Brands and Grey Cloak 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 Grey Cloak Tech are associated (or correlated) with BellRock Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BellRock Brands has no effect on the direction of Grey Cloak i.e., Grey Cloak and BellRock Brands go up and down completely randomly.

Pair Corralation between Grey Cloak and BellRock Brands

Given the investment horizon of 90 days Grey Cloak Tech is expected to generate 1.26 times more return on investment than BellRock Brands. However, Grey Cloak is 1.26 times more volatile than BellRock Brands. It trades about 0.06 of its potential returns per unit of risk. BellRock Brands is currently generating about -0.12 per unit of risk. If you would invest  376.00  in Grey Cloak Tech on September 19, 2024 and sell it today you would lose (51.00) from holding Grey Cloak Tech or give up 13.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Grey Cloak Tech  vs.  BellRock Brands

Grey Cloak Tech

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grey Cloak Tech are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Grey Cloak showed solid returns over the last few months and may actually be approaching a breakup point.

BellRock Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BellRock Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Grey Cloak and BellRock Brands

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

The idea behind Grey Cloak Tech and BellRock Brands 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.