Correlation Between Geron and Innovent Biologics
Can any of the company-specific risk be diversified away by investing in both Geron and Innovent Biologics 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 Innovent Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geron and Innovent Biologics, you can compare the effects of market volatilities on Geron and Innovent Biologics 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 Innovent Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geron and Innovent Biologics.
Diversification Opportunities for Geron and Innovent Biologics
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Geron and Innovent is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Geron and Innovent Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovent Biologics 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 Innovent Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovent Biologics has no effect on the direction of Geron i.e., Geron and Innovent Biologics go up and down completely randomly.
Pair Corralation between Geron and Innovent Biologics
Given the investment horizon of 90 days Geron is expected to generate 2.12 times less return on investment than Innovent Biologics. But when comparing it to its historical volatility, Geron is 1.03 times less risky than Innovent Biologics. It trades about 0.02 of its potential returns per unit of risk. Innovent Biologics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 442.00 in Innovent Biologics on September 3, 2024 and sell it today you would earn a total of 43.00 from holding Innovent Biologics or generate 9.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Geron vs. Innovent Biologics
Performance |
| Timeline |
| Geron |
| Innovent Biologics |
Geron and Innovent Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geron and Innovent Biologics
The main advantage of trading using opposite Geron and Innovent Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geron position performs unexpectedly, Innovent Biologics 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 Innovent Biologics will offset losses from the drop in Innovent Biologics' long position.| Geron vs. Viking Therapeutics | Geron vs. TG Therapeutics | Geron vs. X4 Pharmaceuticals | Geron vs. PDS Biotechnology Corp |
| Innovent Biologics vs. Telix Pharmaceuticals Limited | Innovent Biologics vs. Keros Therapeutics | Innovent Biologics vs. MAIA Biotechnology | Innovent Biologics vs. Clarity 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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