Correlation Between Gentex and Integrated Biopharma

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Can any of the company-specific risk be diversified away by investing in both Gentex and Integrated Biopharma 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 Gentex and Integrated Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gentex and Integrated Biopharma, you can compare the effects of market volatilities on Gentex and Integrated Biopharma 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 Gentex with a short position of Integrated Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentex and Integrated Biopharma.

Diversification Opportunities for Gentex and Integrated Biopharma

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between Gentex and Integrated is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and Integrated Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Biopharma and Gentex 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 Gentex are associated (or correlated) with Integrated Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Biopharma has no effect on the direction of Gentex i.e., Gentex and Integrated Biopharma go up and down completely randomly.

Pair Corralation between Gentex and Integrated Biopharma

If you would invest  23.00  in Integrated Biopharma on January 22, 2024 and sell it today you would earn a total of  0.00  from holding Integrated Biopharma or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy4.76%
ValuesDaily Returns

Gentex  vs.  Integrated Biopharma

 Performance 
       Timeline  
Gentex 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Gentex are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Gentex is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
Integrated Biopharma 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Integrated Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in May 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Gentex and Integrated Biopharma Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gentex and Integrated Biopharma

The main advantage of trading using opposite Gentex and Integrated Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentex position performs unexpectedly, Integrated Biopharma 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 Integrated Biopharma will offset losses from the drop in Integrated Biopharma's long position.
The idea behind Gentex and Integrated Biopharma 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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