Correlation Between GemVaxKAEL CoLtd and Zinus

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

By analyzing existing cross correlation between GemVaxKAEL CoLtd and Zinus Inc, you can compare the effects of market volatilities on GemVaxKAEL CoLtd and Zinus 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 GemVaxKAEL CoLtd with a short position of Zinus. Check out your portfolio center. Please also check ongoing floating volatility patterns of GemVaxKAEL CoLtd and Zinus.

Diversification Opportunities for GemVaxKAEL CoLtd and Zinus

-0.52

Correlation Coefficient

GemVaxKAEL CoLtd  Zinus

Excellent diversification

The 3 months correlation between GemVaxKAEL and Zinus is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding GemVaxKAEL CoLtd and Zinus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinus Inc and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd are associated (or correlated) with Zinus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinus Inc has no effect on the direction of GemVaxKAEL CoLtd i.e., GemVaxKAEL CoLtd and Zinus go up and down completely randomly.

Pair Corralation between GemVaxKAEL CoLtd and Zinus

Assuming the 90 days trading horizon GemVaxKAEL CoLtd is expected to under-perform the Zinus. In addition to that, GemVaxKAEL CoLtd is 1.84 times more volatile than Zinus Inc. It trades about -0.05 of its total potential returns per unit of risk. Zinus Inc is currently generating about 0.08 per unit of volatility. If you would invest  2,113,637  in Zinus Inc on September 23, 2024 and sell it today you would earn a total of  231,363  from holding Zinus Inc or generate 10.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

GemVaxKAEL CoLtd  vs.  Zinus Inc

GemVaxKAEL CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GemVaxKAEL CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, GemVaxKAEL CoLtd is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Zinus Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zinus Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zinus sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GemVaxKAEL CoLtd and Zinus

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

The idea behind GemVaxKAEL CoLtd and Zinus Inc 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.