Correlation Between Geron and Relief Therapeutics
Can any of the company-specific risk be diversified away by investing in both Geron and Relief Therapeutics 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 Relief Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geron and Relief Therapeutics Holding, you can compare the effects of market volatilities on Geron and Relief Therapeutics 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 Relief Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geron and Relief Therapeutics.
Diversification Opportunities for Geron and Relief Therapeutics
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Geron and Relief is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Geron and Relief Therapeutics Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Relief Therapeutics 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 Relief Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Relief Therapeutics has no effect on the direction of Geron i.e., Geron and Relief Therapeutics go up and down completely randomly.
Pair Corralation between Geron and Relief Therapeutics
Given the investment horizon of 90 days Geron is expected to under-perform the Relief Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Geron is 1.39 times less risky than Relief Therapeutics. The stock trades about -0.32 of its potential returns per unit of risk. The Relief Therapeutics Holding is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest 426.00 in Relief Therapeutics Holding on November 27, 2024 and sell it today you would lose (81.00) from holding Relief Therapeutics Holding or give up 19.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geron vs. Relief Therapeutics Holding
Performance |
| Timeline |
| Geron |
| Relief Therapeutics |
Geron and Relief Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geron and Relief Therapeutics
The main advantage of trading using opposite Geron and Relief Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geron position performs unexpectedly, Relief Therapeutics 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 Relief Therapeutics will offset losses from the drop in Relief Therapeutics' long position.| Geron vs. Viking Therapeutics | Geron vs. TG Therapeutics | Geron vs. X4 Pharmaceuticals | Geron vs. PDS Biotechnology Corp |
| Relief Therapeutics vs. Starwin Media Holdings | Relief Therapeutics vs. Here Media | Relief Therapeutics vs. Mattel Inc | Relief Therapeutics vs. Verra Mobility Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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