Correlation Between Gemz Corp and UMF

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

By analyzing existing cross correlation between Gemz Corp and UMF Group, you can compare the effects of market volatilities on Gemz Corp and UMF 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 Gemz Corp with a short position of UMF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gemz Corp and UMF.

Diversification Opportunities for Gemz Corp and UMF

0.07

Correlation Coefficient

Gemz Corp  UMF

Significant diversification

The 3 months correlation between Gemz and UMF is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Gemz Corp and UMF Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UMF Group and Gemz Corp 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 Gemz Corp are associated (or correlated) with UMF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UMF Group has no effect on the direction of Gemz Corp i.e., Gemz Corp and UMF go up and down completely randomly.

Pair Corralation between Gemz Corp and UMF

If you would invest  0.09  in Gemz Corp on October 3, 2024 and sell it today you would lose (0.06) from holding Gemz Corp or give up 66.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.37%
Values	Daily Returns

Gemz Corp  vs.  UMF Group

Gemz Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gemz Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Gemz Corp reported solid returns over the last few months and may actually be approaching a breakup point.

UMF Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Gemz Corp and UMF

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

The idea behind Gemz Corp and UMF Group 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.