Correlation Between Gemina Laboratories and Rigel Pharmaceuticals

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

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

Diversification Opportunities for Gemina Laboratories and Rigel Pharmaceuticals

-0.12

Correlation Coefficient

Gemina Laboratories  Rigel Pharmaceuticals

Good diversification

The 3 months correlation between Gemina and Rigel is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Gemina Laboratories and Rigel Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rigel Pharmaceuticals 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 Rigel Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rigel Pharmaceuticals has no effect on the direction of Gemina Laboratories i.e., Gemina Laboratories and Rigel Pharmaceuticals go up and down completely randomly.

Pair Corralation between Gemina Laboratories and Rigel Pharmaceuticals

Assuming the 90 days horizon Gemina Laboratories is expected to generate 1.21 times more return on investment than Rigel Pharmaceuticals. However, Gemina Laboratories is 1.21 times more volatile than Rigel Pharmaceuticals. It trades about 0.16 of its potential returns per unit of risk. Rigel Pharmaceuticals is currently generating about 0.05 per unit of risk. If you would invest  55.00  in Gemina Laboratories on December 29, 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	Insignificant
Accuracy	98.39%
Values	Daily Returns

Gemina Laboratories  vs.  Rigel Pharmaceuticals

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.

Rigel Pharmaceuticals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rigel Pharmaceuticals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating technical and fundamental indicators, Rigel Pharmaceuticals disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gemina Laboratories and Rigel Pharmaceuticals

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

The idea behind Gemina Laboratories and Rigel Pharmaceuticals 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.

Check out your portfolio center.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.