Correlation Between Generation Bio and Monte Rosa
Can any of the company-specific risk be diversified away by investing in both Generation Bio and Monte Rosa 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 Generation Bio and Monte Rosa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Generation Bio Co and Monte Rosa Therapeutics, you can compare the effects of market volatilities on Generation Bio and Monte Rosa 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 Generation Bio with a short position of Monte Rosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generation Bio and Monte Rosa.
Diversification Opportunities for Generation Bio and Monte Rosa
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Generation and Monte is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Generation Bio Co and Monte Rosa Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monte Rosa Therapeutics and Generation Bio 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 Generation Bio Co are associated (or correlated) with Monte Rosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monte Rosa Therapeutics has no effect on the direction of Generation Bio i.e., Generation Bio and Monte Rosa go up and down completely randomly.
Pair Corralation between Generation Bio and Monte Rosa
Given the investment horizon of 90 days Generation Bio Co is expected to under-perform the Monte Rosa. But the stock apears to be less risky and, when comparing its historical volatility, Generation Bio Co is 4.06 times less risky than Monte Rosa. The stock trades about -0.43 of its potential returns per unit of risk. The Monte Rosa Therapeutics is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 487.00 in Monte Rosa Therapeutics on August 24, 2024 and sell it today you would earn a total of 348.00 from holding Monte Rosa Therapeutics or generate 71.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Generation Bio Co vs. Monte Rosa Therapeutics
Performance |
| Timeline |
| Generation Bio |
| Monte Rosa Therapeutics |
Generation Bio and Monte Rosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Generation Bio and Monte Rosa
The main advantage of trading using opposite Generation Bio and Monte Rosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generation Bio position performs unexpectedly, Monte Rosa 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 Monte Rosa will offset losses from the drop in Monte Rosa's long position.| Generation Bio vs. Monte Rosa Therapeutics | Generation Bio vs. Nkarta Inc | Generation Bio vs. Lyell Immunopharma | Generation Bio vs. Sana Biotechnology |
| Monte Rosa vs. Nkarta Inc | Monte Rosa vs. Lyell Immunopharma | Monte Rosa vs. Generation Bio Co | Monte Rosa 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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