Correlation Between Genenta Science and Enzon Pharmaceuticals

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

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

Diversification Opportunities for Genenta Science and Enzon Pharmaceuticals

0.3

Correlation Coefficient

Genenta Science  Enzon Pharmaceuticals

Weak diversification

The 3 months correlation between Genenta and Enzon is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Genenta Science SpA and Enzon Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enzon Pharmaceuticals and Genenta Science 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 Genenta Science SpA are associated (or correlated) with Enzon Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enzon Pharmaceuticals has no effect on the direction of Genenta Science i.e., Genenta Science and Enzon Pharmaceuticals go up and down completely randomly.

Pair Corralation between Genenta Science and Enzon Pharmaceuticals

Given the investment horizon of 90 days Genenta Science SpA is expected to generate 0.86 times more return on investment than Enzon Pharmaceuticals. However, Genenta Science SpA is 1.16 times less risky than Enzon Pharmaceuticals. It trades about 0.02 of its potential returns per unit of risk. Enzon Pharmaceuticals is currently generating about 0.0 per unit of risk. If you would invest  625.00  in Genenta Science SpA on October 10, 2024 and sell it today you would lose (116.00) from holding Genenta Science SpA or give up 18.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	26.6%
Values	Daily Returns

Genenta Science SpA  vs.  Enzon Pharmaceuticals

Genenta Science SpA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genenta Science SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Enzon Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Genenta Science and Enzon Pharmaceuticals

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

The idea behind Genenta Science SpA and Enzon Pharmaceuticals 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.