Correlation Between Akero Therapeutics and Genmab AS
Can any of the company-specific risk be diversified away by investing in both Akero Therapeutics and Genmab AS 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 Akero Therapeutics and Genmab AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akero Therapeutics and Genmab AS, you can compare the effects of market volatilities on Akero Therapeutics and Genmab AS 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 Akero Therapeutics with a short position of Genmab AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akero Therapeutics and Genmab AS.
Diversification Opportunities for Akero Therapeutics and Genmab AS
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Akero and Genmab is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Akero Therapeutics and Genmab AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genmab AS and Akero Therapeutics 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 Akero Therapeutics are associated (or correlated) with Genmab AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genmab AS has no effect on the direction of Akero Therapeutics i.e., Akero Therapeutics and Genmab AS go up and down completely randomly.
Pair Corralation between Akero Therapeutics and Genmab AS
Given the investment horizon of 90 days Akero Therapeutics is expected to generate 7.7 times more return on investment than Genmab AS. However, Akero Therapeutics is 7.7 times more volatile than Genmab AS. It trades about 0.24 of its potential returns per unit of risk. Genmab AS is currently generating about -0.22 per unit of risk. If you would invest 2,616 in Akero Therapeutics on November 9, 2024 and sell it today you would earn a total of 2,879 from holding Akero Therapeutics or generate 110.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akero Therapeutics vs. Genmab AS
Performance |
| Timeline |
| Akero Therapeutics |
| Genmab AS |
Akero Therapeutics and Genmab AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akero Therapeutics and Genmab AS
The main advantage of trading using opposite Akero Therapeutics and Genmab AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akero Therapeutics position performs unexpectedly, Genmab AS 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 Genmab AS will offset losses from the drop in Genmab AS's long position.| Akero Therapeutics vs. Terns Pharmaceuticals | Akero Therapeutics vs. Madrigal Pharmaceuticals | Akero Therapeutics vs. Inozyme Pharma | Akero Therapeutics vs. Viking Therapeutics |
| Genmab AS vs. Ascendis Pharma AS | Genmab AS vs. Apellis Pharmaceuticals | Genmab AS vs. Akero Therapeutics | Genmab AS vs. Blueprint Medicines Corp |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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