Correlation Between Gemina Laboratories and HAVN Life

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

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

Diversification Opportunities for Gemina Laboratories and HAVN Life

0.64

Correlation Coefficient

Gemina Laboratories  HAVN Life

Poor diversification

The 3 months correlation between Gemina and HAVN is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Gemina Laboratories and HAVN Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAVN Life Sciences 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 HAVN Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAVN Life Sciences has no effect on the direction of Gemina Laboratories i.e., Gemina Laboratories and HAVN Life go up and down completely randomly.

Pair Corralation between Gemina Laboratories and HAVN Life

Assuming the 90 days horizon Gemina Laboratories is expected to generate 109.09 times less return on investment than HAVN Life. But when comparing it to its historical volatility, Gemina Laboratories is 23.74 times less risky than HAVN Life. It trades about 0.04 of its potential returns per unit of risk. HAVN Life Sciences is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  0.52  in HAVN Life Sciences on October 11, 2024 and sell it today you would lose (0.42) from holding HAVN Life Sciences or give up 80.77% of portfolio value over 90 days.

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

Gemina Laboratories  vs.  HAVN Life Sciences

Gemina Laboratories

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gemina Laboratories are ranked lower than 9 (%) 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.

HAVN Life Sciences

Risk-Adjusted Performance

12 of 100

Good

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

Pair Trading with Gemina Laboratories and HAVN Life

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

The idea behind Gemina Laboratories and HAVN 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.