Correlation Between Gentex and COSCIENS Biopharma

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

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

Diversification Opportunities for Gentex and COSCIENS Biopharma

-0.03

Correlation Coefficient

Gentex  COSCIENS Biopharma

Good diversification

The 3 months correlation between Gentex and COSCIENS is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and COSCIENS Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCIENS Biopharma and Gentex 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 Gentex are associated (or correlated) with COSCIENS Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCIENS Biopharma has no effect on the direction of Gentex i.e., Gentex and COSCIENS Biopharma go up and down completely randomly.

Pair Corralation between Gentex and COSCIENS Biopharma

Given the investment horizon of 90 days Gentex is expected to generate 0.31 times more return on investment than COSCIENS Biopharma. However, Gentex is 3.23 times less risky than COSCIENS Biopharma. It trades about 0.01 of its potential returns per unit of risk. COSCIENS Biopharma is currently generating about -0.06 per unit of risk. If you would invest  2,801  in Gentex on October 4, 2024 and sell it today you would earn a total of  72.00  from holding Gentex or generate 2.57% return on investment over 90 days.

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

Gentex  vs.  COSCIENS Biopharma

Gentex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gentex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Gentex is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

COSCIENS Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COSCIENS Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Gentex and COSCIENS Biopharma

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

The idea behind Gentex and COSCIENS Biopharma 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.