Correlation Between Compugen and Evogene
Can any of the company-specific risk be diversified away by investing in both Compugen and Evogene 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 Compugen and Evogene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compugen and Evogene, you can compare the effects of market volatilities on Compugen and Evogene 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 Compugen with a short position of Evogene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compugen and Evogene.
Diversification Opportunities for Compugen and Evogene
Poor diversification
The 3 months correlation between Compugen and Evogene is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Compugen and Evogene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evogene and Compugen 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 Compugen are associated (or correlated) with Evogene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evogene has no effect on the direction of Compugen i.e., Compugen and Evogene go up and down completely randomly.
Pair Corralation between Compugen and Evogene
Assuming the 90 days trading horizon Compugen is expected to generate 1.82 times more return on investment than Evogene. However, Compugen is 1.82 times more volatile than Evogene. It trades about 0.05 of its potential returns per unit of risk. Evogene is currently generating about -0.04 per unit of risk. If you would invest 33,080 in Compugen on September 3, 2024 and sell it today you would earn a total of 25,020 from holding Compugen or generate 75.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.47% |
| Values | Daily Returns |
Compugen vs. Evogene
Performance |
| Timeline |
| Compugen |
| Evogene |
Compugen and Evogene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compugen and Evogene
The main advantage of trading using opposite Compugen and Evogene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compugen position performs unexpectedly, Evogene 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 Evogene will offset losses from the drop in Evogene's long position.| Compugen vs. Enlivex Therapeutics | Compugen vs. Purple Biotech | Compugen vs. BioLine RX | Compugen vs. Clal Biotechnology Industries |
| Evogene vs. Arcus Biosciences | Evogene vs. Fate Therapeutics | Evogene vs. Pluri Inc | Evogene vs. Lexaria Bioscience 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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