Correlation Between Cardio Diagnostics and Genmab AS

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

By analyzing existing cross correlation between Cardio Diagnostics Holdings and Genmab AS, you can compare the effects of market volatilities on Cardio Diagnostics and Genmab AS 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 Cardio Diagnostics with a short position of Genmab AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardio Diagnostics and Genmab AS.

Diversification Opportunities for Cardio Diagnostics and Genmab AS

0.09

Correlation Coefficient

Cardio Diagnostics  Genmab AS

Significant diversification

The 3 months correlation between Cardio and Genmab is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Cardio Diagnostics Holdings and Genmab AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genmab AS and Cardio Diagnostics 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 Cardio Diagnostics Holdings are associated (or correlated) with Genmab AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genmab AS has no effect on the direction of Cardio Diagnostics i.e., Cardio Diagnostics and Genmab AS go up and down completely randomly.

Pair Corralation between Cardio Diagnostics and Genmab AS

Given the investment horizon of 90 days Cardio Diagnostics Holdings is expected to under-perform the Genmab AS. In addition to that, Cardio Diagnostics is 3.02 times more volatile than Genmab AS. It trades about -0.08 of its total potential returns per unit of risk. Genmab AS is currently generating about 0.0 per unit of volatility. If you would invest  2,077  in Genmab AS on December 28, 2024 and sell it today you would lose (63.00) from holding Genmab AS or give up 3.03% of portfolio value over 90 days.

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

Cardio Diagnostics Holdings  vs.  Genmab AS

Cardio Diagnostics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cardio Diagnostics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Genmab AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Genmab AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Genmab AS is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cardio Diagnostics and Genmab AS

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

The idea behind Cardio Diagnostics Holdings and Genmab AS 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.