Correlation Between Safety Shot and Painreform

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

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

Diversification Opportunities for Safety Shot and Painreform

-0.28

Correlation Coefficient

Safety Shot  Painreform

Very good diversification

The 3 months correlation between Safety and Painreform is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Safety Shot and Painreform in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Painreform and Safety Shot 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 Safety Shot are associated (or correlated) with Painreform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Painreform has no effect on the direction of Safety Shot i.e., Safety Shot and Painreform go up and down completely randomly.

Pair Corralation between Safety Shot and Painreform

Given the investment horizon of 90 days Safety Shot is expected to generate 2.94 times more return on investment than Painreform. However, Safety Shot is 2.94 times more volatile than Painreform. It trades about 0.15 of its potential returns per unit of risk. Painreform is currently generating about -0.18 per unit of risk. If you would invest  50.00  in Safety Shot on May 6, 2025 and sell it today you would earn a total of  51.00  from holding Safety Shot or generate 102.0% return on investment over 90 days.

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

Safety Shot  vs.  Painreform

Safety Shot

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Safety Shot are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Safety Shot unveiled solid returns over the last few months and may actually be approaching a breakup point.

Painreform

Risk-Adjusted Performance

Very Weak

Over the last 90 days Painreform has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Safety Shot and Painreform

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

The idea behind Safety Shot and Painreform 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.