Correlation Between Gain Therapeutics and Abcam PLC

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

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

Diversification Opportunities for Gain Therapeutics and Abcam PLC

0.0

Correlation Coefficient

Gain Therapeutics  Abcam PLC

Pay attention - limited upside

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

Pair Corralation between Gain Therapeutics and Abcam PLC

If you would invest  176.00  in Gain Therapeutics on December 27, 2024 and sell it today you would earn a total of  28.00  from holding Gain Therapeutics or generate 15.91% return on investment over 90 days.

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

Gain Therapeutics  vs.  Abcam PLC

Gain Therapeutics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gain Therapeutics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Gain Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Abcam PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Abcam PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Abcam PLC is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Gain Therapeutics and Abcam PLC

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

The idea behind Gain Therapeutics and Abcam PLC 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.