Correlation Between CannBioRx Life and Singular Genomics

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

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

Diversification Opportunities for CannBioRx Life and Singular Genomics

-0.04

Correlation Coefficient

CannBioRx Life  Singular Genomics

Good diversification

The 3 months correlation between CannBioRx and Singular is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding CannBioRx Life Sciences and Singular Genomics Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singular Genomics Systems and CannBioRx Life 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 CannBioRx Life Sciences are associated (or correlated) with Singular Genomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singular Genomics Systems has no effect on the direction of CannBioRx Life i.e., CannBioRx Life and Singular Genomics go up and down completely randomly.

Pair Corralation between CannBioRx Life and Singular Genomics

Assuming the 90 days horizon CannBioRx Life Sciences is expected to generate 4.75 times more return on investment than Singular Genomics. However, CannBioRx Life is 4.75 times more volatile than Singular Genomics Systems. It trades about 0.13 of its potential returns per unit of risk. Singular Genomics Systems is currently generating about -0.11 per unit of risk. If you would invest  0.85  in CannBioRx Life Sciences on March 14, 2024 and sell it today you would earn a total of  0.79  from holding CannBioRx Life Sciences or generate 92.94% return on investment over 90 days.

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

CannBioRx Life Sciences  vs.  Singular Genomics Systems

CannBioRx Life Sciences

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CannBioRx Life Sciences are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, CannBioRx Life showed solid returns over the last few months and may actually be approaching a breakup point.

Singular Genomics Systems

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CannBioRx Life and Singular Genomics

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

The idea behind CannBioRx Life Sciences and Singular Genomics Systems 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 CEOs Directory module to screen CEOs from public companies around the world.