Correlation Between Gain Therapeutics and Day One

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Can any of the company-specific risk be diversified away by investing in both Gain Therapeutics and Day One 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 Day One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gain Therapeutics and Day One Biopharmaceuticals, you can compare the effects of market volatilities on Gain Therapeutics and Day One 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 Day One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gain Therapeutics and Day One.

Diversification Opportunities for Gain Therapeutics and Day One

0.51
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Gain and Day is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Gain Therapeutics and Day One Biopharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Day One Biopharmaceu 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 Day One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Day One Biopharmaceu has no effect on the direction of Gain Therapeutics i.e., Gain Therapeutics and Day One go up and down completely randomly.

Pair Corralation between Gain Therapeutics and Day One

Given the investment horizon of 90 days Gain Therapeutics is expected to under-perform the Day One. In addition to that, Gain Therapeutics is 1.54 times more volatile than Day One Biopharmaceuticals. It trades about -0.02 of its total potential returns per unit of risk. Day One Biopharmaceuticals is currently generating about 0.02 per unit of volatility. If you would invest  1,358  in Day One Biopharmaceuticals on August 26, 2024 and sell it today you would earn a total of  14.00  from holding Day One Biopharmaceuticals or generate 1.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Gain Therapeutics  vs.  Day One Biopharmaceuticals

 Performance 
       Timeline  
Gain Therapeutics 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Gain Therapeutics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Gain Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.
Day One Biopharmaceu 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Day One Biopharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Day One is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Gain Therapeutics and Day One Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gain Therapeutics and Day One

The main advantage of trading using opposite Gain Therapeutics and Day One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gain Therapeutics position performs unexpectedly, Day One 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 Day One will offset losses from the drop in Day One's long position.
The idea behind Gain Therapeutics and Day One Biopharmaceuticals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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