Correlation Between Greenwich Lifesciences and Bed Bath

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

Diversification Opportunities for Greenwich Lifesciences and Bed Bath

0.07
  Correlation Coefficient

Significant diversification

The 1 month correlation between Greenwich and Bed Bath is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Greenwich Lifesciences and Bed Bath Beyond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bed Bath Beyond and Greenwich Lifesciences 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 Greenwich Lifesciences are associated (or correlated) with Bed Bath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bed Bath Beyond has no effect on the direction of Greenwich Lifesciences i.e., Greenwich Lifesciences and Bed Bath go up and down completely randomly.

Pair Corralation between Greenwich Lifesciences and Bed Bath

Given the investment horizon of 90 days Greenwich Lifesciences is expected to generate 5.68 times more return on investment than Bed Bath. However, Greenwich Lifesciences is 5.68 times more volatile than Bed Bath Beyond. It trades about 0.04 of its potential returns per unit of risk. Bed Bath Beyond is currently generating about 0.01 per unit of risk. If you would invest  490.00  in Greenwich Lifesciences on June 30, 2022 and sell it today you would earn a total of  421.00  from holding Greenwich Lifesciences or generate 85.92% return on investment over 90 days.
Time Period1 Month [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Greenwich Lifesciences  vs.  Bed Bath Beyond

 Performance (%) 
       Timeline  
Greenwich Lifesciences 
Greenwich Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Greenwich Lifesciences are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Greenwich Lifesciences is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Greenwich Price Channel

Bed Bath Beyond 
Bed Bath Performance
0 of 100
Over the last 90 days Bed Bath Beyond has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in October 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Bed Bath Price Channel

Greenwich Lifesciences and Bed Bath Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Greenwich Lifesciences and Bed Bath

The main advantage of trading using opposite Greenwich Lifesciences and Bed Bath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenwich Lifesciences position performs unexpectedly, Bed Bath 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 Bed Bath will offset losses from the drop in Bed Bath's long position.
Greenwich Lifesciences vs. Clearwater Paper Corp
The idea behind Greenwich Lifesciences and Bed Bath Beyond 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.
Bed Bath vs. Clearwater Paper Corp
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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