Correlation Between Taigen Biopharmaceutica and Swancor Holding

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

By analyzing existing cross correlation between Taigen Biopharmaceuticals Holdings and Swancor Holding Co, you can compare the effects of market volatilities on Taigen Biopharmaceutica and Swancor Holding 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 Taigen Biopharmaceutica with a short position of Swancor Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taigen Biopharmaceutica and Swancor Holding.

Diversification Opportunities for Taigen Biopharmaceutica and Swancor Holding

0.9

Correlation Coefficient

Taigen Biopharmaceutica  Swancor Holding

Almost no diversification

The 3 months correlation between Taigen and Swancor is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Taigen Biopharmaceuticals Hold and Swancor Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swancor Holding and Taigen Biopharmaceutica 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 Taigen Biopharmaceuticals Holdings are associated (or correlated) with Swancor Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swancor Holding has no effect on the direction of Taigen Biopharmaceutica i.e., Taigen Biopharmaceutica and Swancor Holding go up and down completely randomly.

Pair Corralation between Taigen Biopharmaceutica and Swancor Holding

Assuming the 90 days trading horizon Taigen Biopharmaceuticals Holdings is expected to generate 0.75 times more return on investment than Swancor Holding. However, Taigen Biopharmaceuticals Holdings is 1.34 times less risky than Swancor Holding. It trades about -0.12 of its potential returns per unit of risk. Swancor Holding Co is currently generating about -0.23 per unit of risk. If you would invest  1,200  in Taigen Biopharmaceuticals Holdings on September 16, 2024 and sell it today you would lose (55.00) from holding Taigen Biopharmaceuticals Holdings or give up 4.58% of portfolio value over 90 days.

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

Taigen Biopharmaceuticals Hold  vs.  Swancor Holding Co

Taigen Biopharmaceutica

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taigen Biopharmaceuticals Holdings 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 January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Swancor Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Swancor Holding Co 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 January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Taigen Biopharmaceutica and Swancor Holding

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

The idea behind Taigen Biopharmaceuticals Holdings and Swancor Holding Co 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.