Correlation Between Geron and Oncology Pharma
Can any of the company-specific risk be diversified away by investing in both Geron and Oncology Pharma 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 Oncology Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geron and Oncology Pharma, you can compare the effects of market volatilities on Geron and Oncology Pharma 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 Oncology Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geron and Oncology Pharma.
Diversification Opportunities for Geron and Oncology Pharma
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Geron and Oncology is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Geron and Oncology Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oncology Pharma 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 Oncology Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oncology Pharma has no effect on the direction of Geron i.e., Geron and Oncology Pharma go up and down completely randomly.
Pair Corralation between Geron and Oncology Pharma
Given the investment horizon of 90 days Geron is expected to generate 2337.66 times less return on investment than Oncology Pharma. But when comparing it to its historical volatility, Geron is 131.28 times less risky than Oncology Pharma. It trades about 0.02 of its potential returns per unit of risk. Oncology Pharma is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Oncology Pharma on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Oncology Pharma or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Geron vs. Oncology Pharma
Performance |
| Timeline |
| Geron |
| Oncology Pharma |
Geron and Oncology Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geron and Oncology Pharma
The main advantage of trading using opposite Geron and Oncology Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geron position performs unexpectedly, Oncology Pharma 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 Oncology Pharma will offset losses from the drop in Oncology Pharma's long position.| Geron vs. Viking Therapeutics | Geron vs. TG Therapeutics | Geron vs. X4 Pharmaceuticals | Geron vs. PDS Biotechnology Corp |
| Oncology Pharma vs. Regen BioPharma | Oncology Pharma vs. Regen BioPharma | Oncology Pharma vs. Therapeutic Solutions International | Oncology Pharma vs. Alpha Cognition |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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