Correlation Between Intercure and Gencell

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

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

Diversification Opportunities for Intercure and Gencell

0.47

Correlation Coefficient

Intercure  Gencell

Very weak diversification

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

Pair Corralation between Intercure and Gencell

Assuming the 90 days trading horizon Intercure is expected to generate 1.08 times more return on investment than Gencell. However, Intercure is 1.08 times more volatile than Gencell. It trades about -0.03 of its potential returns per unit of risk. Gencell is currently generating about -0.07 per unit of risk. If you would invest  133,000  in Intercure on September 26, 2024 and sell it today you would lose (69,200) from holding Intercure or give up 52.03% of portfolio value over 90 days.

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

Intercure  vs.  Gencell

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.

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.

Pair Trading with Intercure and Gencell

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

The idea behind Intercure and Gencell 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.