Correlation Between GemVaxKAEL CoLtd and N Citron

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

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

Diversification Opportunities for GemVaxKAEL CoLtd and N Citron

0.47

Correlation Coefficient

GemVaxKAEL CoLtd  N Citron

Very weak diversification

The 3 months correlation between GemVaxKAEL and 101400 is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding GemVaxKAEL CoLtd and N Citron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N Citron and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd are associated (or correlated) with N Citron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N Citron has no effect on the direction of GemVaxKAEL CoLtd i.e., GemVaxKAEL CoLtd and N Citron go up and down completely randomly.

Pair Corralation between GemVaxKAEL CoLtd and N Citron

Assuming the 90 days trading horizon GemVaxKAEL CoLtd is expected to generate 1.65 times more return on investment than N Citron. However, GemVaxKAEL CoLtd is 1.65 times more volatile than N Citron. It trades about 0.4 of its potential returns per unit of risk. N Citron is currently generating about -0.02 per unit of risk. If you would invest  1,413,000  in GemVaxKAEL CoLtd on December 25, 2024 and sell it today you would earn a total of  2,557,000  from holding GemVaxKAEL CoLtd or generate 180.96% return on investment over 90 days.

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

GemVaxKAEL CoLtd  vs.  N Citron

GemVaxKAEL CoLtd

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in GemVaxKAEL CoLtd are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, GemVaxKAEL CoLtd sustained solid returns over the last few months and may actually be approaching a breakup point.

N Citron

Risk-Adjusted Performance

Very Weak

Over the last 90 days N Citron has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, N Citron is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GemVaxKAEL CoLtd and N Citron

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

The idea behind GemVaxKAEL CoLtd and N Citron 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.