Correlation Between Geron and Algernon Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Geron and Algernon Pharmaceuticals 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 Geron and Algernon Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geron and Algernon Pharmaceuticals, you can compare the effects of market volatilities on Geron and Algernon Pharmaceuticals 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 Geron with a short position of Algernon Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geron and Algernon Pharmaceuticals.
Diversification Opportunities for Geron and Algernon Pharmaceuticals
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Geron and Algernon is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Geron and Algernon Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algernon Pharmaceuticals and Geron 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 Geron are associated (or correlated) with Algernon Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algernon Pharmaceuticals has no effect on the direction of Geron i.e., Geron and Algernon Pharmaceuticals go up and down completely randomly.
Pair Corralation between Geron and Algernon Pharmaceuticals
Given the investment horizon of 90 days Geron is expected to generate 0.62 times more return on investment than Algernon Pharmaceuticals. However, Geron is 1.62 times less risky than Algernon Pharmaceuticals. It trades about 0.04 of its potential returns per unit of risk. Algernon Pharmaceuticals is currently generating about 0.0 per unit of risk. If you would invest 238.00 in Geron on September 2, 2024 and sell it today you would earn a total of 174.00 from holding Geron or generate 73.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Geron vs. Algernon Pharmaceuticals
Performance |
| Timeline |
| Geron |
| Algernon Pharmaceuticals |
Geron and Algernon Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geron and Algernon Pharmaceuticals
The main advantage of trading using opposite Geron and Algernon Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geron position performs unexpectedly, Algernon Pharmaceuticals 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 Algernon Pharmaceuticals will offset losses from the drop in Algernon Pharmaceuticals' long position.| Geron vs. Viking Therapeutics | Geron vs. TG Therapeutics | Geron vs. X4 Pharmaceuticals | Geron vs. PDS Biotechnology Corp |
| Algernon Pharmaceuticals vs. Rigel Pharmaceuticals | Algernon Pharmaceuticals vs. Geron | Algernon Pharmaceuticals vs. Verastem | Algernon Pharmaceuticals vs. Immutep Ltd ADR |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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