Correlation Between Gemina Laboratories and Smurfit Kappa
Can any of the company-specific risk be diversified away by investing in both Gemina Laboratories and Smurfit Kappa 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 Gemina Laboratories and Smurfit Kappa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gemina Laboratories and Smurfit Kappa Group, you can compare the effects of market volatilities on Gemina Laboratories and Smurfit Kappa 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 Gemina Laboratories with a short position of Smurfit Kappa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gemina Laboratories and Smurfit Kappa.
Diversification Opportunities for Gemina Laboratories and Smurfit Kappa
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gemina and Smurfit is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Gemina Laboratories and Smurfit Kappa Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smurfit Kappa Group and Gemina Laboratories 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 Gemina Laboratories are associated (or correlated) with Smurfit Kappa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smurfit Kappa Group has no effect on the direction of Gemina Laboratories i.e., Gemina Laboratories and Smurfit Kappa go up and down completely randomly.
Pair Corralation between Gemina Laboratories and Smurfit Kappa
Assuming the 90 days horizon Gemina Laboratories is expected to generate 2.3 times more return on investment than Smurfit Kappa. However, Gemina Laboratories is 2.3 times more volatile than Smurfit Kappa Group. It trades about 0.05 of its potential returns per unit of risk. Smurfit Kappa Group is currently generating about 0.05 per unit of risk. If you would invest 22.00 in Gemina Laboratories on September 3, 2024 and sell it today you would earn a total of 33.00 from holding Gemina Laboratories or generate 150.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.29% |
| Values | Daily Returns |
Gemina Laboratories vs. Smurfit Kappa Group
Performance |
| Timeline |
| Gemina Laboratories |
| Smurfit Kappa Group |
Gemina Laboratories and Smurfit Kappa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gemina Laboratories and Smurfit Kappa
The main advantage of trading using opposite Gemina Laboratories and Smurfit Kappa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gemina Laboratories position performs unexpectedly, Smurfit Kappa 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 Smurfit Kappa will offset losses from the drop in Smurfit Kappa's long position.| Gemina Laboratories vs. Therapeutic Solutions International | Gemina Laboratories vs. Alpha Cognition | Gemina Laboratories vs. Regen BioPharma | Gemina Laboratories vs. Vg Life Sciences |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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