Correlation Between PepGen and Organogenesis Holdings

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

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

Diversification Opportunities for PepGen and Organogenesis Holdings

0.24

Correlation Coefficient

PepGen  Organogenesis Holdings

Modest diversification

The 3 months correlation between PepGen and Organogenesis is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding PepGen and Organogenesis Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Organogenesis Holdings and PepGen 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 PepGen are associated (or correlated) with Organogenesis Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Organogenesis Holdings has no effect on the direction of PepGen i.e., PepGen and Organogenesis Holdings go up and down completely randomly.

Pair Corralation between PepGen and Organogenesis Holdings

Given the investment horizon of 90 days PepGen is expected to under-perform the Organogenesis Holdings. In addition to that, PepGen is 3.1 times more volatile than Organogenesis Holdings. It trades about -0.11 of its total potential returns per unit of risk. Organogenesis Holdings is currently generating about -0.07 per unit of volatility. If you would invest  387.00  in Organogenesis Holdings on November 28, 2024 and sell it today you would lose (69.00) from holding Organogenesis Holdings or give up 17.83% of portfolio value over 90 days.

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

PepGen  vs.  Organogenesis Holdings

PepGen

Risk-Adjusted Performance

Very Weak

Over the last 90 days PepGen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Organogenesis Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Organogenesis Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with PepGen and Organogenesis Holdings

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

The idea behind PepGen and Organogenesis Holdings 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.