Correlation Between Genomma Lab and Grupo Gigante

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

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

Diversification Opportunities for Genomma Lab and Grupo Gigante

0.46

Correlation Coefficient

Genomma Lab  Grupo Gigante

Very weak diversification

The 3 months correlation between Genomma and Grupo is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Genomma Lab Internacional and Grupo Gigante S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Gigante S and Genomma Lab 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 Genomma Lab Internacional are associated (or correlated) with Grupo Gigante. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Gigante S has no effect on the direction of Genomma Lab i.e., Genomma Lab and Grupo Gigante go up and down completely randomly.

Pair Corralation between Genomma Lab and Grupo Gigante

Assuming the 90 days trading horizon Genomma Lab Internacional is expected to generate 1.07 times more return on investment than Grupo Gigante. However, Genomma Lab is 1.07 times more volatile than Grupo Gigante S. It trades about 0.13 of its potential returns per unit of risk. Grupo Gigante S is currently generating about 0.08 per unit of risk. If you would invest  2,222  in Genomma Lab Internacional on September 26, 2024 and sell it today you would earn a total of  324.00  from holding Genomma Lab Internacional or generate 14.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Genomma Lab Internacional  vs.  Grupo Gigante S

Genomma Lab Internacional

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Genomma Lab Internacional are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Genomma Lab showed solid returns over the last few months and may actually be approaching a breakup point.

Grupo Gigante S

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Gigante S are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Grupo Gigante may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Genomma Lab and Grupo Gigante

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

The idea behind Genomma Lab Internacional and Grupo Gigante S 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..