Correlation Between Gemina Laboratories and Charlottes Web

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

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

Diversification Opportunities for Gemina Laboratories and Charlottes Web

-0.5

Correlation Coefficient

Gemina Laboratories  Charlottes Web

Very good diversification

The 3 months correlation between Gemina and Charlottes is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Gemina Laboratories and Charlottes Web Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charlottes Web Holdings and Gemina Laboratories 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 Gemina Laboratories are associated (or correlated) with Charlottes Web. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charlottes Web Holdings has no effect on the direction of Gemina Laboratories i.e., Gemina Laboratories and Charlottes Web go up and down completely randomly.

Pair Corralation between Gemina Laboratories and Charlottes Web

Assuming the 90 days horizon Gemina Laboratories is expected to generate 0.88 times more return on investment than Charlottes Web. However, Gemina Laboratories is 1.13 times less risky than Charlottes Web. It trades about 0.16 of its potential returns per unit of risk. Charlottes Web Holdings is currently generating about 0.03 per unit of risk. If you would invest  55.00  in Gemina Laboratories on December 31, 2024 and sell it today you would earn a total of  30.00  from holding Gemina Laboratories or generate 54.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Gemina Laboratories  vs.  Charlottes Web Holdings

Gemina Laboratories

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gemina Laboratories are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating fundamental drivers, Gemina Laboratories reported solid returns over the last few months and may actually be approaching a breakup point.

Charlottes Web Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Charlottes Web Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, Charlottes Web may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Gemina Laboratories and Charlottes Web

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

The idea behind Gemina Laboratories and Charlottes Web Holdings 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.