Correlation Between GH Research and Awakn Life

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

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

Diversification Opportunities for GH Research and Awakn Life

-0.16

Correlation Coefficient

GH Research  Awakn Life

Good diversification

The 3 months correlation between GHRS and Awakn is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding GH Research PLC and Awakn Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awakn Life Sciences and GH Research 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 GH Research PLC are associated (or correlated) with Awakn Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awakn Life Sciences has no effect on the direction of GH Research i.e., GH Research and Awakn Life go up and down completely randomly.

Pair Corralation between GH Research and Awakn Life

Given the investment horizon of 90 days GH Research is expected to generate 3.09 times less return on investment than Awakn Life. But when comparing it to its historical volatility, GH Research PLC is 2.4 times less risky than Awakn Life. It trades about 0.03 of its potential returns per unit of risk. Awakn Life Sciences is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  32.00  in Awakn Life Sciences on December 3, 2024 and sell it today you would lose (25.50) from holding Awakn Life Sciences or give up 79.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.4%
Values	Daily Returns

GH Research PLC  vs.  Awakn Life Sciences

GH Research PLC

Risk-Adjusted Performance

Modest

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

Awakn Life Sciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Awakn Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with GH Research and Awakn Life

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

The idea behind GH Research PLC and Awakn Life Sciences 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.