Correlation Between Adagene and Gemina Laboratories
Can any of the company-specific risk be diversified away by investing in both Adagene 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 Adagene and Gemina Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adagene and Gemina Laboratories, you can compare the effects of market volatilities on Adagene 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 Adagene with a short position of Gemina Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adagene and Gemina Laboratories.
Diversification Opportunities for Adagene and Gemina Laboratories
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Adagene and Gemina is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Adagene and Gemina Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemina Laboratories and Adagene 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 Adagene 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 Adagene i.e., Adagene and Gemina Laboratories go up and down completely randomly.
Pair Corralation between Adagene and Gemina Laboratories
Given the investment horizon of 90 days Adagene is expected to generate 1.4 times less return on investment than Gemina Laboratories. In addition to that, Adagene is 1.07 times more volatile than Gemina Laboratories. It trades about 0.05 of its total potential returns per unit of risk. Gemina Laboratories is currently generating about 0.07 per unit of volatility. If you would invest 30.00 in Gemina Laboratories on September 3, 2024 and sell it today you would earn a total of 25.00 from holding Gemina Laboratories or generate 83.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Adagene vs. Gemina Laboratories
Performance |
| Timeline |
| Adagene |
| Gemina Laboratories |
Adagene and Gemina Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adagene and Gemina Laboratories
The main advantage of trading using opposite Adagene and Gemina Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adagene 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.| Adagene vs. DiaMedica Therapeutics | Adagene vs. Lyra Therapeutics | Adagene vs. Centessa Pharmaceuticals PLC |
| Gemina Laboratories vs. Therapeutic Solutions International | Gemina Laboratories vs. Alpha Cognition | Gemina Laboratories vs. Vg Life Sciences | Gemina Laboratories vs. Adagene |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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