Correlation Between Gilead Sciences and STRATA Skin
Can any of the company-specific risk be diversified away by investing in both Gilead Sciences and STRATA Skin 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 Gilead Sciences and STRATA Skin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gilead Sciences and STRATA Skin Sciences, you can compare the effects of market volatilities on Gilead Sciences and STRATA Skin 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 Gilead Sciences with a short position of STRATA Skin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gilead Sciences and STRATA Skin.
Diversification Opportunities for Gilead Sciences and STRATA Skin
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gilead and STRATA is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Gilead Sciences and STRATA Skin Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRATA Skin Sciences and Gilead Sciences 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 Gilead Sciences are associated (or correlated) with STRATA Skin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRATA Skin Sciences has no effect on the direction of Gilead Sciences i.e., Gilead Sciences and STRATA Skin go up and down completely randomly.
Pair Corralation between Gilead Sciences and STRATA Skin
Given the investment horizon of 90 days Gilead Sciences is expected to generate 0.58 times more return on investment than STRATA Skin. However, Gilead Sciences is 1.74 times less risky than STRATA Skin. It trades about 0.44 of its potential returns per unit of risk. STRATA Skin Sciences is currently generating about -0.31 per unit of risk. If you would invest 8,914 in Gilead Sciences on November 9, 2024 and sell it today you would earn a total of 890.00 from holding Gilead Sciences or generate 9.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gilead Sciences vs. STRATA Skin Sciences
Performance |
| Timeline |
| Gilead Sciences |
| STRATA Skin Sciences |
Gilead Sciences and STRATA Skin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gilead Sciences and STRATA Skin
The main advantage of trading using opposite Gilead Sciences and STRATA Skin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gilead Sciences position performs unexpectedly, STRATA Skin 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 STRATA Skin will offset losses from the drop in STRATA Skin's long position.| Gilead Sciences vs. Amgen Inc | Gilead Sciences vs. Merck Company | Gilead Sciences vs. AbbVie Inc | Gilead Sciences vs. Johnson Johnson |
| STRATA Skin vs. Axogen Inc | STRATA Skin vs. Ainos Inc | STRATA Skin vs. LENSAR Inc | STRATA Skin vs. Nexalin Technology |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |