Correlation Between BGNE Old and Viridian Therapeutics
Can any of the company-specific risk be diversified away by investing in both BGNE Old and Viridian Therapeutics 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 BGNE Old and Viridian Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BGNE Old and Viridian Therapeutics, you can compare the effects of market volatilities on BGNE Old and Viridian Therapeutics 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 BGNE Old with a short position of Viridian Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGNE Old and Viridian Therapeutics.
Diversification Opportunities for BGNE Old and Viridian Therapeutics
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BGNE and Viridian is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding BGNE Old and Viridian Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viridian Therapeutics and BGNE Old 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 BGNE Old are associated (or correlated) with Viridian Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viridian Therapeutics has no effect on the direction of BGNE Old i.e., BGNE Old and Viridian Therapeutics go up and down completely randomly.
Pair Corralation between BGNE Old and Viridian Therapeutics
Given the investment horizon of 90 days BGNE Old is expected to generate 0.63 times more return on investment than Viridian Therapeutics. However, BGNE Old is 1.58 times less risky than Viridian Therapeutics. It trades about 0.05 of its potential returns per unit of risk. Viridian Therapeutics is currently generating about 0.03 per unit of risk. If you would invest 14,776 in BGNE Old on November 3, 2024 and sell it today you would earn a total of 3,695 from holding BGNE Old or generate 25.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 91.94% |
| Values | Daily Returns |
BGNE Old vs. Viridian Therapeutics
Performance |
| Timeline |
| BGNE Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Viridian Therapeutics |
BGNE Old and Viridian Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGNE Old and Viridian Therapeutics
The main advantage of trading using opposite BGNE Old and Viridian Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGNE Old position performs unexpectedly, Viridian Therapeutics 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 Viridian Therapeutics will offset losses from the drop in Viridian Therapeutics' long position.| BGNE Old vs. Ascendis Pharma AS | BGNE Old vs. Apellis Pharmaceuticals | BGNE Old vs. Akero Therapeutics | BGNE Old vs. Blueprint Medicines Corp |
| Viridian Therapeutics vs. Nuvalent | Viridian Therapeutics vs. Arcellx | Viridian Therapeutics vs. Vaxcyte | Viridian Therapeutics vs. Crinetics Pharmaceuticals |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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