Correlation Between Genmab AS and Ascendis Pharma

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

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

Diversification Opportunities for Genmab AS and Ascendis Pharma

0.05

Correlation Coefficient

Genmab AS  Ascendis Pharma

Significant diversification

The 3 months correlation between Genmab and Ascendis is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Genmab AS and Ascendis Pharma AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendis Pharma 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 Ascendis Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascendis Pharma AS has no effect on the direction of Genmab AS i.e., Genmab AS and Ascendis Pharma go up and down completely randomly.

Pair Corralation between Genmab AS and Ascendis Pharma

Given the investment horizon of 90 days Genmab AS is expected to under-perform the Ascendis Pharma. But the stock apears to be less risky and, when comparing its historical volatility, Genmab AS is 1.79 times less risky than Ascendis Pharma. The stock trades about -0.12 of its potential returns per unit of risk. The Ascendis Pharma AS is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  13,717  in Ascendis Pharma AS on September 5, 2024 and sell it today you would lose (582.00) from holding Ascendis Pharma AS or give up 4.24% of portfolio value over 90 days.

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

Genmab AS  vs.  Ascendis Pharma 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. Despite conflicting performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Ascendis Pharma AS

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ascendis Pharma AS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Ascendis Pharma may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Genmab AS and Ascendis Pharma

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

The idea behind Genmab AS and Ascendis Pharma 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 Commodity Directory module to find actively traded commodities issued by global exchanges.