Correlation Between Sunmax Biotechnology and GenMont Biotech
Can any of the company-specific risk be diversified away by investing in both Sunmax Biotechnology and GenMont Biotech 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 Sunmax Biotechnology and GenMont Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunmax Biotechnology Co and GenMont Biotech, you can compare the effects of market volatilities on Sunmax Biotechnology and GenMont Biotech 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 Sunmax Biotechnology with a short position of GenMont Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunmax Biotechnology and GenMont Biotech.
Diversification Opportunities for Sunmax Biotechnology and GenMont Biotech
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunmax and GenMont is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sunmax Biotechnology Co and GenMont Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GenMont Biotech and Sunmax Biotechnology 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 Sunmax Biotechnology Co are associated (or correlated) with GenMont Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GenMont Biotech has no effect on the direction of Sunmax Biotechnology i.e., Sunmax Biotechnology and GenMont Biotech go up and down completely randomly.
Pair Corralation between Sunmax Biotechnology and GenMont Biotech
Assuming the 90 days trading horizon Sunmax Biotechnology Co is expected to generate 0.85 times more return on investment than GenMont Biotech. However, Sunmax Biotechnology Co is 1.18 times less risky than GenMont Biotech. It trades about 0.2 of its potential returns per unit of risk. GenMont Biotech is currently generating about -0.16 per unit of risk. If you would invest 26,700 in Sunmax Biotechnology Co on September 1, 2024 and sell it today you would earn a total of 1,100 from holding Sunmax Biotechnology Co or generate 4.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunmax Biotechnology Co vs. GenMont Biotech
Performance |
| Timeline |
| Sunmax Biotechnology |
| GenMont Biotech |
Sunmax Biotechnology and GenMont Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunmax Biotechnology and GenMont Biotech
The main advantage of trading using opposite Sunmax Biotechnology and GenMont Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunmax Biotechnology position performs unexpectedly, GenMont Biotech 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 GenMont Biotech will offset losses from the drop in GenMont Biotech's long position.| Sunmax Biotechnology vs. Medigen Vaccine Biologics | Sunmax Biotechnology vs. OBI Pharma | Sunmax Biotechnology vs. TaiMed Biologics | Sunmax Biotechnology vs. Tanvex BioPharma |
| GenMont Biotech vs. Alchip Technologies | GenMont Biotech vs. Univacco Technology | GenMont Biotech vs. Li Kang Biomedical | GenMont Biotech vs. Jia Jie Biomedical |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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