Correlation Between Gran Tierra and Chembio Diagnostics

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Gran Tierra and Chembio Diagnostics 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 Chembio Diagnostics 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 Chembio Diagnostics, you can compare the effects of market volatilities on Gran Tierra and Chembio Diagnostics 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 Chembio Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gran Tierra and Chembio Diagnostics.

Diversification Opportunities for Gran Tierra and Chembio Diagnostics

0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Gran Tierra and Chembio is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Gran Tierra Energy and Chembio Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chembio Diagnostics 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 Chembio Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chembio Diagnostics has no effect on the direction of Gran Tierra i.e., Gran Tierra and Chembio Diagnostics go up and down completely randomly.

Pair Corralation between Gran Tierra and Chembio Diagnostics

Considering the 90-day investment horizon Gran Tierra Energy is expected to under-perform the Chembio Diagnostics. But the stock apears to be less risky and, when comparing its historical volatility, Gran Tierra Energy is 2.27 times less risky than Chembio Diagnostics. The stock trades about -0.14 of its potential returns per unit of risk. The Chembio Diagnostics is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  35.00  in Chembio Diagnostics on September 4, 2022 and sell it today you would lose (5.00)  from holding Chembio Diagnostics or give up 14.29% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Gran Tierra Energy  vs.  Chembio Diagnostics

 Performance (%) 
       Timeline  
Gran Tierra Energy 
Gran Tierra Performance
0 of 100
Over the last 90 days Gran Tierra Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Gran Tierra Price Channel

Chembio Diagnostics 
Chembio Performance
0 of 100
Over the last 90 days Chembio Diagnostics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in January 2023. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Chembio Price Channel

Gran Tierra and Chembio Diagnostics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gran Tierra and Chembio Diagnostics

The main advantage of trading using opposite Gran Tierra and Chembio Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gran Tierra position performs unexpectedly, Chembio Diagnostics 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 Chembio Diagnostics will offset losses from the drop in Chembio Diagnostics' long position.
Gran Tierra vs. Amplify Energy Corp
Gran Tierra vs. ATP Oil Gas
Gran Tierra vs. Abraxas Petroleum
Gran Tierra vs. Berry Petroleum Corp
The idea behind Gran Tierra Energy and Chembio Diagnostics 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.
Chembio Diagnostics vs. AmerisourceBergen
Chembio Diagnostics vs. Adicet Bio
Chembio Diagnostics vs. Addus HomeCare
Chembio Diagnostics vs. Apollo Medical Holdings
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

Other Complementary Tools

Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Transaction History
View history of all your transactions and understand their impact on performance
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Transaction History
View history of all your transactions and understand their impact on performance
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Commodity Channel Index
Use Commodity Channel Index to analyze current equity momentum
Go