Correlation Between Cingulate Warrants and Genmab AS

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

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

Diversification Opportunities for Cingulate Warrants and Genmab AS

-0.15

Correlation Coefficient

Cingulate Warrants  Genmab AS

Good diversification

The 3 months correlation between Cingulate and Genmab is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Cingulate Warrants and Genmab AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genmab AS and Cingulate Warrants 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 Cingulate Warrants 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 Cingulate Warrants i.e., Cingulate Warrants and Genmab AS go up and down completely randomly.

Pair Corralation between Cingulate Warrants and Genmab AS

Assuming the 90 days horizon Cingulate Warrants is expected to generate 6.87 times more return on investment than Genmab AS. However, Cingulate Warrants is 6.87 times more volatile than Genmab AS. It trades about 0.09 of its potential returns per unit of risk. Genmab AS is currently generating about -0.01 per unit of risk. If you would invest  5.13  in Cingulate Warrants on December 29, 2024 and sell it today you would earn a total of  0.08  from holding Cingulate Warrants or generate 1.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

Cingulate Warrants  vs.  Genmab AS

Cingulate Warrants

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cingulate Warrants are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Cingulate Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

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 Cingulate Warrants and Genmab AS

The main advantage of trading using opposite Cingulate Warrants and Genmab AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cingulate Warrants 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 Cingulate Warrants 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.