Correlation Between Genenta Science and NewAmsterdam Pharma

Can any of the company-specific risk be diversified away by investing in both Genenta Science and NewAmsterdam 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 Genenta Science and NewAmsterdam Pharma 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 NewAmsterdam Pharma, you can compare the effects of market volatilities on Genenta Science and NewAmsterdam 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 Genenta Science with a short position of NewAmsterdam Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genenta Science and NewAmsterdam Pharma.

Diversification Opportunities for Genenta Science and NewAmsterdam Pharma

0.62

Correlation Coefficient

Genenta Science  NewAmsterdam Pharma

Poor diversification

The 3 months correlation between Genenta and NewAmsterdam is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Genenta Science SpA and NewAmsterdam Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewAmsterdam Pharma 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 NewAmsterdam Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewAmsterdam Pharma has no effect on the direction of Genenta Science i.e., Genenta Science and NewAmsterdam Pharma go up and down completely randomly.

Pair Corralation between Genenta Science and NewAmsterdam Pharma

Given the investment horizon of 90 days Genenta Science SpA is expected to generate 0.78 times more return on investment than NewAmsterdam Pharma. However, Genenta Science SpA is 1.28 times less risky than NewAmsterdam Pharma. It trades about -0.01 of its potential returns per unit of risk. NewAmsterdam Pharma is currently generating about -0.03 per unit of risk. If you would invest  430.00  in Genenta Science SpA on December 29, 2024 and sell it today you would lose (32.00) from holding Genenta Science SpA or give up 7.44% of portfolio value over 90 days.

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

Genenta Science SpA  vs.  NewAmsterdam Pharma

Genenta Science SpA

Risk-Adjusted Performance

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 somewhat strong basic indicators, Genenta Science is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

NewAmsterdam Pharma

Risk-Adjusted Performance

Very Weak

Over the last 90 days NewAmsterdam Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Genenta Science and NewAmsterdam Pharma

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

The idea behind Genenta Science SpA and NewAmsterdam Pharma 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.