Correlation Between GenMont Biotech and Medigen Biotechnology
Can any of the company-specific risk be diversified away by investing in both GenMont Biotech and Medigen Biotechnology 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 GenMont Biotech and Medigen Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GenMont Biotech and Medigen Biotechnology, you can compare the effects of market volatilities on GenMont Biotech and Medigen Biotechnology 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 GenMont Biotech with a short position of Medigen Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of GenMont Biotech and Medigen Biotechnology.
Diversification Opportunities for GenMont Biotech and Medigen Biotechnology
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GenMont and Medigen is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding GenMont Biotech and Medigen Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medigen Biotechnology and GenMont Biotech 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 GenMont Biotech are associated (or correlated) with Medigen Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medigen Biotechnology has no effect on the direction of GenMont Biotech i.e., GenMont Biotech and Medigen Biotechnology go up and down completely randomly.
Pair Corralation between GenMont Biotech and Medigen Biotechnology
Assuming the 90 days trading horizon GenMont Biotech is expected to generate 0.65 times more return on investment than Medigen Biotechnology. However, GenMont Biotech is 1.53 times less risky than Medigen Biotechnology. It trades about -0.27 of its potential returns per unit of risk. Medigen Biotechnology is currently generating about -0.19 per unit of risk. If you would invest 2,290 in GenMont Biotech on September 24, 2024 and sell it today you would lose (330.00) from holding GenMont Biotech or give up 14.41% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 98.46% |
Values | Daily Returns |
GenMont Biotech vs. Medigen Biotechnology
Performance |
Timeline |
GenMont Biotech |
Medigen Biotechnology |
GenMont Biotech and Medigen Biotechnology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GenMont Biotech and Medigen Biotechnology
The main advantage of trading using opposite GenMont Biotech and Medigen Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GenMont Biotech position performs unexpectedly, Medigen Biotechnology 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 Medigen Biotechnology will offset losses from the drop in Medigen Biotechnology's long position.GenMont Biotech vs. CHC Healthcare Group | GenMont Biotech vs. Sinphar Pharmaceutical Co | GenMont Biotech vs. Abnova Taiwan Corp | GenMont Biotech vs. Wellell |
Medigen Biotechnology vs. CHC Healthcare Group | Medigen Biotechnology vs. GenMont Biotech | Medigen Biotechnology vs. Sinphar Pharmaceutical Co | Medigen Biotechnology vs. Abnova Taiwan Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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