Correlation Between Genmab AS and SKAKO AS

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

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

Diversification Opportunities for Genmab AS and SKAKO AS

0.56

Correlation Coefficient

Genmab AS  SKAKO AS

Very weak diversification

The 3 months correlation between Genmab and SKAKO is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Genmab AS and SKAKO AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKAKO 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 SKAKO AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKAKO AS has no effect on the direction of Genmab AS i.e., Genmab AS and SKAKO AS go up and down completely randomly.

Pair Corralation between Genmab AS and SKAKO AS

Assuming the 90 days trading horizon Genmab AS is expected to under-perform the SKAKO AS. But the stock apears to be less risky and, when comparing its historical volatility, Genmab AS is 1.19 times less risky than SKAKO AS. The stock trades about -0.13 of its potential returns per unit of risk. The SKAKO AS is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  8,380  in SKAKO AS on September 12, 2024 and sell it today you would lose (720.00) from holding SKAKO AS or give up 8.59% of portfolio value over 90 days.

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

Genmab AS  vs.  SKAKO AS

Genmab AS

Risk-Adjusted Performance

0 of 100

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.

SKAKO AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SKAKO AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Genmab AS and SKAKO AS

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

The idea behind Genmab AS and SKAKO 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.