Correlation Between GenMont Biotech and Taigen Biopharmaceutica

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

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

Diversification Opportunities for GenMont Biotech and Taigen Biopharmaceutica

-0.04

Correlation Coefficient

GenMont Biotech  Taigen Biopharmaceutica

Good diversification

The 3 months correlation between GenMont and Taigen is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding GenMont Biotech and Taigen Biopharmaceuticals Hold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taigen Biopharmaceutica 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 Taigen Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taigen Biopharmaceutica has no effect on the direction of GenMont Biotech i.e., GenMont Biotech and Taigen Biopharmaceutica go up and down completely randomly.

Pair Corralation between GenMont Biotech and Taigen Biopharmaceutica

Assuming the 90 days trading horizon GenMont Biotech is expected to generate 0.87 times more return on investment than Taigen Biopharmaceutica. However, GenMont Biotech is 1.16 times less risky than Taigen Biopharmaceutica. It trades about 0.16 of its potential returns per unit of risk. Taigen Biopharmaceuticals Holdings is currently generating about 0.05 per unit of risk. If you would invest  1,960  in GenMont Biotech on December 23, 2024 and sell it today you would earn a total of  340.00  from holding GenMont Biotech or generate 17.35% return on investment over 90 days.

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

GenMont Biotech  vs.  Taigen Biopharmaceuticals Hold

GenMont Biotech

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GenMont Biotech are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, GenMont Biotech showed solid returns over the last few months and may actually be approaching a breakup point.

Taigen Biopharmaceutica

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Taigen Biopharmaceuticals Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Taigen Biopharmaceutica may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with GenMont Biotech and Taigen Biopharmaceutica

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

The idea behind GenMont Biotech and Taigen Biopharmaceuticals Holdings 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .