Correlation Between Edesa Biotech and EnGene Holdings
Can any of the company-specific risk be diversified away by investing in both Edesa Biotech and EnGene Holdings 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 Edesa Biotech and EnGene Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edesa Biotech and enGene Holdings Common, you can compare the effects of market volatilities on Edesa Biotech and EnGene Holdings 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 Edesa Biotech with a short position of EnGene Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edesa Biotech and EnGene Holdings.
Diversification Opportunities for Edesa Biotech and EnGene Holdings
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Edesa and EnGene is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Edesa Biotech and enGene Holdings Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enGene Holdings Common and Edesa Biotech 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 Edesa Biotech are associated (or correlated) with EnGene Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enGene Holdings Common has no effect on the direction of Edesa Biotech i.e., Edesa Biotech and EnGene Holdings go up and down completely randomly.
Pair Corralation between Edesa Biotech and EnGene Holdings
Given the investment horizon of 90 days Edesa Biotech is expected to under-perform the EnGene Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Edesa Biotech is 1.04 times less risky than EnGene Holdings. The stock trades about -0.32 of its potential returns per unit of risk. The enGene Holdings Common is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 625.00 in enGene Holdings Common on August 26, 2024 and sell it today you would earn a total of 143.00 from holding enGene Holdings Common or generate 22.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edesa Biotech vs. enGene Holdings Common
Performance |
| Timeline |
| Edesa Biotech |
| enGene Holdings Common |
Edesa Biotech and EnGene Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edesa Biotech and EnGene Holdings
The main advantage of trading using opposite Edesa Biotech and EnGene Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edesa Biotech position performs unexpectedly, EnGene Holdings 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 EnGene Holdings will offset losses from the drop in EnGene Holdings' long position.| Edesa Biotech vs. Eliem Therapeutics | Edesa Biotech vs. HCW Biologics | Edesa Biotech vs. Scpharmaceuticals | Edesa Biotech vs. Milestone Pharmaceuticals |
| EnGene Holdings vs. Beam Therapeutics | EnGene Holdings vs. Caribou Biosciences | EnGene Holdings vs. Intellia Therapeutics | EnGene Holdings vs. Sana Biotechnology |
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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