Correlation Between Alpha Cognition and Gemina Laboratories

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

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

Diversification Opportunities for Alpha Cognition and Gemina Laboratories

-0.59

Correlation Coefficient

Alpha Cognition  Gemina Laboratories

Excellent diversification

The 3 months correlation between Alpha and Gemina is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Cognition and Gemina Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemina Laboratories and Alpha Cognition 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 Alpha Cognition 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 Alpha Cognition i.e., Alpha Cognition and Gemina Laboratories go up and down completely randomly.

Pair Corralation between Alpha Cognition and Gemina Laboratories

Assuming the 90 days horizon Alpha Cognition is expected to generate 13.19 times more return on investment than Gemina Laboratories. However, Alpha Cognition is 13.19 times more volatile than Gemina Laboratories. It trades about 0.07 of its potential returns per unit of risk. Gemina Laboratories is currently generating about 0.09 per unit of risk. If you would invest  1,550  in Alpha Cognition on September 3, 2024 and sell it today you would lose (888.00) from holding Alpha Cognition or give up 57.29% of portfolio value over 90 days.

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

Alpha Cognition  vs.  Gemina Laboratories

Alpha Cognition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpha Cognition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Gemina Laboratories

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gemina Laboratories are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent fundamental drivers, Gemina Laboratories reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alpha Cognition and Gemina Laboratories

The main advantage of trading using opposite Alpha Cognition and Gemina Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Cognition 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 Alpha Cognition 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.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.