Correlation Between Amazon and Gemina Laboratories
Can any of the company-specific risk be diversified away by investing in both Amazon 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 Amazon and Gemina Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Gemina Laboratories, you can compare the effects of market volatilities on Amazon 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 Amazon with a short position of Gemina Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Gemina Laboratories.
Diversification Opportunities for Amazon and Gemina Laboratories
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amazon and Gemina is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Gemina Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemina Laboratories and Amazon 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 Amazon Inc 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 Amazon i.e., Amazon and Gemina Laboratories go up and down completely randomly.
Pair Corralation between Amazon and Gemina Laboratories
Given the investment horizon of 90 days Amazon is expected to generate 7.38 times less return on investment than Gemina Laboratories. But when comparing it to its historical volatility, Amazon Inc is 4.66 times less risky than Gemina Laboratories. It trades about 0.19 of its potential returns per unit of risk. Gemina Laboratories is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 34.00 in Gemina Laboratories on September 4, 2024 and sell it today you would earn a total of 23.00 from holding Gemina Laboratories or generate 67.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Amazon Inc vs. Gemina Laboratories
Performance |
| Timeline |
| Amazon Inc |
| Gemina Laboratories |
Amazon and Gemina Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Gemina Laboratories
The main advantage of trading using opposite Amazon and Gemina Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon 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 Amazon Inc 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.| Gemina Laboratories vs. Novo Nordisk AS | Gemina Laboratories vs. Genmab AS | Gemina Laboratories vs. Inhibikase Therapeutics | Gemina Laboratories vs. Purple Biotech |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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