Correlation Between Gran Tierra and Cytodyn

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

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

Diversification Opportunities for Gran Tierra and Cytodyn

-0.39

Correlation Coefficient

Gran Tierra  Cytodyn

Very good diversification

The 3 months correlation between Gran and Cytodyn is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Gran Tierra Energy and Cytodyn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytodyn and Gran Tierra 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 Gran Tierra Energy are associated (or correlated) with Cytodyn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytodyn has no effect on the direction of Gran Tierra i.e., Gran Tierra and Cytodyn go up and down completely randomly.

Pair Corralation between Gran Tierra and Cytodyn

Considering the 90-day investment horizon Gran Tierra Energy is expected to generate 0.61 times more return on investment than Cytodyn. However, Gran Tierra Energy is 1.64 times less risky than Cytodyn. It trades about 0.31 of its potential returns per unit of risk. Cytodyn is currently generating about -0.11 per unit of risk. If you would invest  688.00  in Gran Tierra Energy on January 25, 2024 and sell it today you would earn a total of  127.00  from holding Gran Tierra Energy or generate 18.46% return on investment over 90 days.

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

Gran Tierra Energy  vs.  Cytodyn

Gran Tierra Energy

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gran Tierra Energy are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Gran Tierra exhibited solid returns over the last few months and may actually be approaching a breakup point.

Cytodyn

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cytodyn are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Cytodyn showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gran Tierra and Cytodyn

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

The idea behind Gran Tierra Energy and Cytodyn 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.