Correlation Between Combigene and Gabather

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

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

Diversification Opportunities for Combigene and Gabather

0.11

Correlation Coefficient

Combigene  Gabather

Average diversification

The 3 months correlation between Combigene and Gabather is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Combigene AB and Gabather AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabather AB and Combigene 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 Combigene AB are associated (or correlated) with Gabather. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabather AB has no effect on the direction of Combigene i.e., Combigene and Gabather go up and down completely randomly.

Pair Corralation between Combigene and Gabather

Assuming the 90 days trading horizon Combigene AB is expected to under-perform the Gabather. But the stock apears to be less risky and, when comparing its historical volatility, Combigene AB is 2.7 times less risky than Gabather. The stock trades about -0.01 of its potential returns per unit of risk. The Gabather AB is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  4.08  in Gabather AB on April 24, 2025 and sell it today you would earn a total of  2.50  from holding Gabather AB or generate 61.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Combigene AB  vs.  Gabather AB

Combigene AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Combigene AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Combigene is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Gabather AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gabather AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Gabather unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Combigene and Gabather

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

The idea behind Combigene AB and Gabather AB 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.