Correlation Between Bio Path and GH Research
Can any of the company-specific risk be diversified away by investing in both Bio Path and GH Research 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 Bio Path and GH Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bio Path Holdings and GH Research PLC, you can compare the effects of market volatilities on Bio Path and GH Research 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 Bio Path with a short position of GH Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Path and GH Research.
Diversification Opportunities for Bio Path and GH Research
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bio and GHRS is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bio Path Holdings and GH Research PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GH Research PLC and Bio Path 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 Bio Path Holdings are associated (or correlated) with GH Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GH Research PLC has no effect on the direction of Bio Path i.e., Bio Path and GH Research go up and down completely randomly.
Pair Corralation between Bio Path and GH Research
Given the investment horizon of 90 days Bio Path Holdings is expected to under-perform the GH Research. In addition to that, Bio Path is 1.43 times more volatile than GH Research PLC. It trades about -0.05 of its total potential returns per unit of risk. GH Research PLC is currently generating about -0.03 per unit of volatility. If you would invest 1,104 in GH Research PLC on August 25, 2024 and sell it today you would lose (177.00) from holding GH Research PLC or give up 16.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Bio Path Holdings vs. GH Research PLC
Performance |
| Timeline |
| Bio Path Holdings |
| GH Research PLC |
Bio Path and GH Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bio Path and GH Research
The main advantage of trading using opposite Bio Path and GH Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio Path position performs unexpectedly, GH Research 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 GH Research will offset losses from the drop in GH Research's long position.| Bio Path vs. Capricor Therapeutics | Bio Path vs. NextCure | Bio Path vs. Pulmatrix | Bio Path vs. Crinetics Pharmaceuticals |
| GH Research vs. Molecular Partners AG | GH Research vs. MediciNova | GH Research vs. Anebulo Pharmaceuticals | GH Research vs. Champions Oncology |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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