Correlation Between GRIN and Serum

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

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

Diversification Opportunities for GRIN and Serum

0.03

Correlation Coefficient

GRIN  Serum

Significant diversification

The 3 months correlation between GRIN and Serum is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding GRIN and Serum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serum and GRIN 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 GRIN are associated (or correlated) with Serum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serum has no effect on the direction of GRIN i.e., GRIN and Serum go up and down completely randomly.

Pair Corralation between GRIN and Serum

Assuming the 90 days trading horizon GRIN is expected to under-perform the Serum. But the crypto coin apears to be less risky and, when comparing its historical volatility, GRIN is 1.44 times less risky than Serum. The crypto coin trades about -0.18 of its potential returns per unit of risk. The Serum is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  5.50  in Serum on January 25, 2024 and sell it today you would lose (0.71) from holding Serum or give up 12.91% of portfolio value over 90 days.

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

GRIN  vs.  Serum

GRIN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GRIN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for GRIN shareholders.

Serum

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Serum has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Serum is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with GRIN and Serum

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

The idea behind GRIN and Serum 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.