Correlation Between GenMont Biotech and Adimmune Corp

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

By analyzing existing cross correlation between GenMont Biotech and Adimmune Corp, you can compare the effects of market volatilities on GenMont Biotech and Adimmune Corp 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 Adimmune Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GenMont Biotech and Adimmune Corp.

Diversification Opportunities for GenMont Biotech and Adimmune Corp

0.95

Correlation Coefficient

GenMont Biotech  Adimmune Corp

Almost no diversification

The 3 months correlation between GenMont and Adimmune is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding GenMont Biotech and Adimmune Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adimmune Corp 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 Adimmune Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adimmune Corp has no effect on the direction of GenMont Biotech i.e., GenMont Biotech and Adimmune Corp go up and down completely randomly.

Pair Corralation between GenMont Biotech and Adimmune Corp

Assuming the 90 days trading horizon GenMont Biotech is expected to generate 0.67 times more return on investment than Adimmune Corp. However, GenMont Biotech is 1.49 times less risky than Adimmune Corp. It trades about -0.03 of its potential returns per unit of risk. Adimmune Corp is currently generating about -0.07 per unit of risk. If you would invest  2,345  in GenMont Biotech on October 11, 2024 and sell it today you would lose (350.00) from holding GenMont Biotech or give up 14.93% of portfolio value over 90 days.

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

GenMont Biotech  vs.  Adimmune Corp

GenMont Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GenMont Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Adimmune Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adimmune Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with GenMont Biotech and Adimmune Corp

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

The idea behind GenMont Biotech and Adimmune Corp 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.