Correlation Between Gain Therapeutics and Biohaven Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Gain Therapeutics and Biohaven Pharmaceutical 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 Gain Therapeutics and Biohaven Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gain Therapeutics and Biohaven Pharmaceutical Holding, you can compare the effects of market volatilities on Gain Therapeutics and Biohaven Pharmaceutical 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 Gain Therapeutics with a short position of Biohaven Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gain Therapeutics and Biohaven Pharmaceutical.
Diversification Opportunities for Gain Therapeutics and Biohaven Pharmaceutical
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gain and Biohaven is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Gain Therapeutics and Biohaven Pharmaceutical Holdin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biohaven Pharmaceutical and Gain 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 Gain Therapeutics are associated (or correlated) with Biohaven Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biohaven Pharmaceutical has no effect on the direction of Gain Therapeutics i.e., Gain Therapeutics and Biohaven Pharmaceutical go up and down completely randomly.
Pair Corralation between Gain Therapeutics and Biohaven Pharmaceutical
Given the investment horizon of 90 days Gain Therapeutics is expected to under-perform the Biohaven Pharmaceutical. In addition to that, Gain Therapeutics is 1.31 times more volatile than Biohaven Pharmaceutical Holding. It trades about -0.02 of its total potential returns per unit of risk. Biohaven Pharmaceutical Holding is currently generating about 0.06 per unit of volatility. If you would invest 2,313 in Biohaven Pharmaceutical Holding on August 31, 2024 and sell it today you would earn a total of 2,288 from holding Biohaven Pharmaceutical Holding or generate 98.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gain Therapeutics vs. Biohaven Pharmaceutical Holdin
Performance |
| Timeline |
| Gain Therapeutics |
| Biohaven Pharmaceutical |
Gain Therapeutics and Biohaven Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gain Therapeutics and Biohaven Pharmaceutical
The main advantage of trading using opposite Gain Therapeutics and Biohaven Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gain Therapeutics position performs unexpectedly, Biohaven Pharmaceutical 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 Biohaven Pharmaceutical will offset losses from the drop in Biohaven Pharmaceutical's long position.| Gain Therapeutics vs. In8bio Inc | Gain Therapeutics vs. Cue Biopharma | Gain Therapeutics vs. Tff Pharmaceuticals | Gain Therapeutics vs. Lantern Pharma |
| Biohaven Pharmaceutical vs. Immunome | Biohaven Pharmaceutical vs. Inhibrx | Biohaven Pharmaceutical vs. Day One Biopharmaceuticals | Biohaven Pharmaceutical vs. Terns 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Commodity Directory Find actively traded commodities issued by global exchanges |