Correlation Between CSL and Gemina Laboratories
Can any of the company-specific risk be diversified away by investing in both CSL 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 CSL and Gemina Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSL Limited and Gemina Laboratories, you can compare the effects of market volatilities on CSL 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 CSL with a short position of Gemina Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and Gemina Laboratories.
Diversification Opportunities for CSL and Gemina Laboratories
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CSL and Gemina is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding CSL Limited and Gemina Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemina Laboratories and CSL 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 CSL Limited 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 CSL i.e., CSL and Gemina Laboratories go up and down completely randomly.
Pair Corralation between CSL and Gemina Laboratories
Assuming the 90 days horizon CSL is expected to generate 523.0 times less return on investment than Gemina Laboratories. But when comparing it to its historical volatility, CSL Limited is 3.5 times less risky than Gemina Laboratories. It trades about 0.0 of its potential returns per unit of risk. Gemina Laboratories is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Gemina Laboratories on September 4, 2024 and sell it today you would earn a total of 35.00 from holding Gemina Laboratories or generate 159.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 92.74% |
| Values | Daily Returns |
CSL Limited vs. Gemina Laboratories
Performance |
| Timeline |
| CSL Limited |
| Gemina Laboratories |
CSL and Gemina Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSL and Gemina Laboratories
The main advantage of trading using opposite CSL and Gemina Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL 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 CSL Limited 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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