Correlation Between Gemina Laboratories and Addex Therapeutics

Can any of the company-specific risk be diversified away by investing in both Gemina Laboratories and Addex Therapeutics 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 Addex Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gemina Laboratories and Addex Therapeutics, you can compare the effects of market volatilities on Gemina Laboratories and Addex Therapeutics 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 Addex Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gemina Laboratories and Addex Therapeutics.

Diversification Opportunities for Gemina Laboratories and Addex Therapeutics

-0.77

Correlation Coefficient

Gemina Laboratories  Addex Therapeutics

Pay attention - limited upside

The 3 months correlation between Gemina and Addex is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Gemina Laboratories and Addex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addex Therapeutics 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 Addex Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addex Therapeutics has no effect on the direction of Gemina Laboratories i.e., Gemina Laboratories and Addex Therapeutics go up and down completely randomly.

Pair Corralation between Gemina Laboratories and Addex Therapeutics

Assuming the 90 days horizon Gemina Laboratories is expected to under-perform the Addex Therapeutics. In addition to that, Gemina Laboratories is 1.83 times more volatile than Addex Therapeutics. It trades about -0.09 of its total potential returns per unit of risk. Addex Therapeutics is currently generating about -0.1 per unit of volatility. If you would invest  878.00  in Addex Therapeutics on September 27, 2024 and sell it today you would lose (79.00) from holding Addex Therapeutics or give up 9.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Gemina Laboratories  vs.  Addex Therapeutics

Gemina Laboratories

Risk-Adjusted Performance

7 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gemina Laboratories are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating fundamental drivers, Gemina Laboratories reported solid returns over the last few months and may actually be approaching a breakup point.

Addex Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Addex Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Addex Therapeutics is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Gemina Laboratories and Addex Therapeutics

The main advantage of trading using opposite Gemina Laboratories and Addex Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gemina Laboratories position performs unexpectedly, Addex Therapeutics 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 Addex Therapeutics will offset losses from the drop in Addex Therapeutics' long position.

The idea behind Gemina Laboratories and Addex Therapeutics 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.