Correlation Between Generation Bio and Virax Biolabs
Can any of the company-specific risk be diversified away by investing in both Generation Bio and Virax Biolabs 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 Virax Biolabs 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 Virax Biolabs Group, you can compare the effects of market volatilities on Generation Bio and Virax Biolabs 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 Virax Biolabs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generation Bio and Virax Biolabs.
Diversification Opportunities for Generation Bio and Virax Biolabs
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Generation and Virax is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Generation Bio Co and Virax Biolabs Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virax Biolabs Group 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 Virax Biolabs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virax Biolabs Group has no effect on the direction of Generation Bio i.e., Generation Bio and Virax Biolabs go up and down completely randomly.
Pair Corralation between Generation Bio and Virax Biolabs
Given the investment horizon of 90 days Generation Bio Co is expected to under-perform the Virax Biolabs. But the stock apears to be less risky and, when comparing its historical volatility, Generation Bio Co is 3.03 times less risky than Virax Biolabs. The stock trades about -0.07 of its potential returns per unit of risk. The Virax Biolabs Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 109.00 in Virax Biolabs Group on August 28, 2024 and sell it today you would earn a total of 102.00 from holding Virax Biolabs Group or generate 93.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Generation Bio Co vs. Virax Biolabs Group
Performance |
| Timeline |
| Generation Bio |
| Virax Biolabs Group |
Generation Bio and Virax Biolabs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Generation Bio and Virax Biolabs
The main advantage of trading using opposite Generation Bio and Virax Biolabs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generation Bio position performs unexpectedly, Virax Biolabs 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 Virax Biolabs will offset losses from the drop in Virax Biolabs' long position.| Generation Bio vs. Eliem Therapeutics | Generation Bio vs. Scpharmaceuticals | Generation Bio vs. Milestone Pharmaceuticals | Generation Bio vs. Seres Therapeutics |
| Virax Biolabs vs. Eliem Therapeutics | Virax Biolabs vs. Scpharmaceuticals | Virax Biolabs vs. Milestone Pharmaceuticals | Virax Biolabs vs. Seres Therapeutics |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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