Correlation Between HAVN Life and Gemina Laboratories

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

By analyzing existing cross correlation between HAVN Life Sciences and Gemina Laboratories, you can compare the effects of market volatilities on HAVN Life and Gemina Laboratories 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 HAVN Life with a short position of Gemina Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of HAVN Life and Gemina Laboratories.

Diversification Opportunities for HAVN Life and Gemina Laboratories

0.82

Correlation Coefficient

HAVN Life  Gemina Laboratories

Very poor diversification

The 3 months correlation between HAVN and Gemina is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding HAVN Life Sciences and Gemina Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemina Laboratories and HAVN Life 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 HAVN Life Sciences are associated (or correlated) with Gemina Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemina Laboratories has no effect on the direction of HAVN Life i.e., HAVN Life and Gemina Laboratories go up and down completely randomly.

Pair Corralation between HAVN Life and Gemina Laboratories

Assuming the 90 days horizon HAVN Life Sciences is expected to generate 0.4 times more return on investment than Gemina Laboratories. However, HAVN Life Sciences is 2.51 times less risky than Gemina Laboratories. It trades about 0.01 of its potential returns per unit of risk. Gemina Laboratories is currently generating about -0.35 per unit of risk. If you would invest  0.52  in HAVN Life Sciences on September 24, 2024 and sell it today you would earn a total of  0.00  from holding HAVN Life Sciences or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

HAVN Life Sciences  vs.  Gemina Laboratories

HAVN Life Sciences

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HAVN Life Sciences are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, HAVN Life reported solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with HAVN Life and Gemina Laboratories

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

The idea behind HAVN Life Sciences and Gemina Laboratories 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.

Check out your portfolio center.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.