Correlation Between Gemina Laboratories and Real Brands

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

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

Diversification Opportunities for Gemina Laboratories and Real Brands

0.17

Correlation Coefficient

Gemina Laboratories  Real Brands

Average diversification

The 3 months correlation between Gemina and Real is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Gemina Laboratories and Real Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Brands 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 Real Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Brands has no effect on the direction of Gemina Laboratories i.e., Gemina Laboratories and Real Brands go up and down completely randomly.

Pair Corralation between Gemina Laboratories and Real Brands

If you would invest  55.00  in Gemina Laboratories on December 28, 2024 and sell it today you would earn a total of  33.00  from holding Gemina Laboratories or generate 60.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Gemina Laboratories  vs.  Real Brands

Gemina Laboratories

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gemina Laboratories are ranked lower than 13 (%) 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.

Real Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Real Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Real Brands is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Gemina Laboratories and Real Brands

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

The idea behind Gemina Laboratories and Real Brands 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.