Correlation Between Genolution and Bridge Biotherapeutics
Can any of the company-specific risk be diversified away by investing in both Genolution and Bridge Biotherapeutics 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 Genolution and Bridge Biotherapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genolution and Bridge Biotherapeutics, you can compare the effects of market volatilities on Genolution and Bridge Biotherapeutics 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 Genolution with a short position of Bridge Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genolution and Bridge Biotherapeutics.
Diversification Opportunities for Genolution and Bridge Biotherapeutics
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Genolution and Bridge is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Genolution and Bridge Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridge Biotherapeutics and Genolution 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 Genolution are associated (or correlated) with Bridge Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridge Biotherapeutics has no effect on the direction of Genolution i.e., Genolution and Bridge Biotherapeutics go up and down completely randomly.
Pair Corralation between Genolution and Bridge Biotherapeutics
Assuming the 90 days trading horizon Genolution is expected to under-perform the Bridge Biotherapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Genolution is 2.09 times less risky than Bridge Biotherapeutics. The stock trades about -0.06 of its potential returns per unit of risk. The Bridge Biotherapeutics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 319,242 in Bridge Biotherapeutics on September 4, 2024 and sell it today you would lose (16,742) from holding Bridge Biotherapeutics or give up 5.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genolution vs. Bridge Biotherapeutics
Performance |
| Timeline |
| Genolution |
| Bridge Biotherapeutics |
Genolution and Bridge Biotherapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genolution and Bridge Biotherapeutics
The main advantage of trading using opposite Genolution and Bridge Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genolution position performs unexpectedly, Bridge Biotherapeutics 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 Bridge Biotherapeutics will offset losses from the drop in Bridge Biotherapeutics' long position.The idea behind Genolution and Bridge Biotherapeutics 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.| Bridge Biotherapeutics vs. AptaBio Therapeutics | Bridge Biotherapeutics vs. Cytogen | Bridge Biotherapeutics vs. Genolution |
Check out your portfolio center.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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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