Correlation Between Gemina Laboratories and T M

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

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

Diversification Opportunities for Gemina Laboratories and T M

-0.42

Correlation Coefficient

Gemina Laboratories  T M

Very good diversification

The 3 months correlation between Gemina and TMMI is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Gemina Laboratories and T M M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T M M 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 T M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T M M has no effect on the direction of Gemina Laboratories i.e., Gemina Laboratories and T M go up and down completely randomly.

Pair Corralation between Gemina Laboratories and T M

Assuming the 90 days horizon Gemina Laboratories is expected to generate 7.64 times less return on investment than T M. But when comparing it to its historical volatility, Gemina Laboratories is 5.94 times less risky than T M. It trades about 0.05 of its potential returns per unit of risk. T M M is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2.24  in T M M on September 28, 2024 and sell it today you would lose (1.87) from holding T M M or give up 83.48% of portfolio value over 90 days.

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

Gemina Laboratories  vs.  T M M

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 unfluctuating fundamental drivers, Gemina Laboratories reported solid returns over the last few months and may actually be approaching a breakup point.

T M M

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in T M M are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent primary indicators, T M demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gemina Laboratories and T M

The main advantage of trading using opposite Gemina Laboratories and T M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gemina Laboratories position performs unexpectedly, T M 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 T M will offset losses from the drop in T M's long position.

The idea behind Gemina Laboratories and T M M 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.