Correlation Between Genmab AS and Aquaporin

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

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

Diversification Opportunities for Genmab AS and Aquaporin

0.26

Correlation Coefficient

Genmab AS  Aquaporin

Modest diversification

The 3 months correlation between Genmab and Aquaporin is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Genmab AS and Aquaporin AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquaporin AS and Genmab AS 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 Genmab AS are associated (or correlated) with Aquaporin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquaporin AS has no effect on the direction of Genmab AS i.e., Genmab AS and Aquaporin go up and down completely randomly.

Pair Corralation between Genmab AS and Aquaporin

Assuming the 90 days trading horizon Genmab AS is expected to under-perform the Aquaporin. But the stock apears to be less risky and, when comparing its historical volatility, Genmab AS is 1.64 times less risky than Aquaporin. The stock trades about -0.05 of its potential returns per unit of risk. The Aquaporin AS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,585  in Aquaporin AS on December 24, 2024 and sell it today you would earn a total of  75.00  from holding Aquaporin AS or generate 4.73% return on investment over 90 days.

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

Genmab AS  vs.  Aquaporin AS

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. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Aquaporin AS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aquaporin AS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Aquaporin may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Genmab AS and Aquaporin

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

The idea behind Genmab AS and Aquaporin 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.