Correlation Between Genomma Lab and Emergent Biosolutions

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

By analyzing existing cross correlation between Genomma Lab Internacional and Emergent Biosolutions, you can compare the effects of market volatilities on Genomma Lab and Emergent Biosolutions 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 Genomma Lab with a short position of Emergent Biosolutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genomma Lab and Emergent Biosolutions.

Diversification Opportunities for Genomma Lab and Emergent Biosolutions

-0.1

Correlation Coefficient

Genomma Lab  Emergent Biosolutions

Good diversification

The 3 months correlation between Genomma and Emergent is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Genomma Lab Internacional and Emergent Biosolutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emergent Biosolutions and Genomma Lab 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 Genomma Lab Internacional are associated (or correlated) with Emergent Biosolutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emergent Biosolutions has no effect on the direction of Genomma Lab i.e., Genomma Lab and Emergent Biosolutions go up and down completely randomly.

Pair Corralation between Genomma Lab and Emergent Biosolutions

If you would invest  929.00  in Emergent Biosolutions on October 4, 2024 and sell it today you would earn a total of  27.00  from holding Emergent Biosolutions or generate 2.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	47.62%
Values	Daily Returns

Genomma Lab Internacional  vs.  Emergent Biosolutions

Genomma Lab Internacional

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Genomma Lab Internacional has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile essential indicators, Genomma Lab reported solid returns over the last few months and may actually be approaching a breakup point.

Emergent Biosolutions

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Emergent Biosolutions are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental drivers, Emergent Biosolutions may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Genomma Lab and Emergent Biosolutions

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

The idea behind Genomma Lab Internacional and Emergent Biosolutions 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.