Correlation Between Gray Television and CannBioRx Life

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

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

Diversification Opportunities for Gray Television and CannBioRx Life

0.25

Correlation Coefficient

Gray Television  CannBioRx Life

Modest diversification

The 3 months correlation between Gray and CannBioRx is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Gray Television and CannBioRx Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CannBioRx Life Sciences and Gray Television 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 Gray Television are associated (or correlated) with CannBioRx Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CannBioRx Life Sciences has no effect on the direction of Gray Television i.e., Gray Television and CannBioRx Life go up and down completely randomly.

Pair Corralation between Gray Television and CannBioRx Life

Considering the 90-day investment horizon Gray Television is expected to generate 3.2 times less return on investment than CannBioRx Life. But when comparing it to its historical volatility, Gray Television is 1.9 times less risky than CannBioRx Life. It trades about 0.07 of its potential returns per unit of risk. CannBioRx Life Sciences is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  0.79  in CannBioRx Life Sciences on May 5, 2025 and sell it today you would earn a total of  0.42  from holding CannBioRx Life Sciences or generate 53.16% return on investment over 90 days.

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

Gray Television  vs.  CannBioRx Life Sciences

Gray Television

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gray Television are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Gray Television displayed solid returns over the last few months and may actually be approaching a breakup point.

CannBioRx Life Sciences

Risk-Adjusted Performance

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 abnormal technical and fundamental indicators, CannBioRx Life showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gray Television and CannBioRx Life

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

The idea behind Gray Television and CannBioRx Life Sciences 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.