Correlation Between BGNE Old and Insmed

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

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

Diversification Opportunities for BGNE Old and Insmed

0.0

Correlation Coefficient

BGNE Old  Insmed

Pay attention - limited upside

The 3 months correlation between BGNE and Insmed is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BGNE Old and Insmed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insmed Inc and BGNE Old 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 BGNE Old are associated (or correlated) with Insmed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insmed Inc has no effect on the direction of BGNE Old i.e., BGNE Old and Insmed go up and down completely randomly.

Pair Corralation between BGNE Old and Insmed

If you would invest  6,887  in Insmed Inc on December 29, 2024 and sell it today you would earn a total of  912.00  from holding Insmed Inc or generate 13.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BGNE Old  vs.  Insmed Inc

BGNE Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days BGNE Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, BGNE Old is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Insmed Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Insmed Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Insmed displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BGNE Old and Insmed

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

The idea behind BGNE Old and Insmed Inc 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.