Correlation Between Gemina Laboratories and SSC Security

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

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

Diversification Opportunities for Gemina Laboratories and SSC Security

0.79

Correlation Coefficient

Gemina Laboratories  SSC Security

Poor diversification

The 3 months correlation between Gemina and SSC is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Gemina Laboratories and SSC Security Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSC Security Services 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 SSC Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSC Security Services has no effect on the direction of Gemina Laboratories i.e., Gemina Laboratories and SSC Security go up and down completely randomly.

Pair Corralation between Gemina Laboratories and SSC Security

Assuming the 90 days horizon Gemina Laboratories is expected to generate 1.08 times more return on investment than SSC Security. However, Gemina Laboratories is 1.08 times more volatile than SSC Security Services. It trades about 0.05 of its potential returns per unit of risk. SSC Security Services is currently generating about 0.02 per unit of risk. If you would invest  37.00  in Gemina Laboratories on September 24, 2024 and sell it today you would earn a total of  7.00  from holding Gemina Laboratories or generate 18.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.4%
Values	Daily Returns

Gemina Laboratories  vs.  SSC Security Services

Gemina Laboratories

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gemina Laboratories are ranked lower than 6 (%) 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.

SSC Security Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSC Security Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SSC Security is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Gemina Laboratories and SSC Security

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

The idea behind Gemina Laboratories and SSC Security Services 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.