Correlation Between Gemina Laboratories and Dassault Aviation

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

By analyzing existing cross correlation between Gemina Laboratories and Dassault Aviation SA, you can compare the effects of market volatilities on Gemina Laboratories and Dassault Aviation 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 Dassault Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gemina Laboratories and Dassault Aviation.

Diversification Opportunities for Gemina Laboratories and Dassault Aviation

-0.57

Correlation Coefficient

Gemina Laboratories  Dassault Aviation

Excellent diversification

The 3 months correlation between Gemina and Dassault is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Gemina Laboratories and Dassault Aviation SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dassault Aviation 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 Dassault Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dassault Aviation has no effect on the direction of Gemina Laboratories i.e., Gemina Laboratories and Dassault Aviation go up and down completely randomly.

Pair Corralation between Gemina Laboratories and Dassault Aviation

Assuming the 90 days horizon Gemina Laboratories is expected to under-perform the Dassault Aviation. In addition to that, Gemina Laboratories is 2.06 times more volatile than Dassault Aviation SA. It trades about -0.08 of its total potential returns per unit of risk. Dassault Aviation SA is currently generating about 0.04 per unit of volatility. If you would invest  20,230  in Dassault Aviation SA on September 29, 2024 and sell it today you would earn a total of  390.00  from holding Dassault Aviation SA or generate 1.93% return on investment over 90 days.

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

Gemina Laboratories  vs.  Dassault Aviation SA

Gemina Laboratories

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gemina Laboratories are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, Gemina Laboratories reported solid returns over the last few months and may actually be approaching a breakup point.

Dassault Aviation

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dassault Aviation SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Dassault Aviation is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Gemina Laboratories and Dassault Aviation

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

The idea behind Gemina Laboratories and Dassault Aviation SA 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.