Correlation Between Geron and Therasense
Can any of the company-specific risk be diversified away by investing in both Geron and Therasense 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 Therasense into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geron and Therasense, you can compare the effects of market volatilities on Geron and Therasense 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 Therasense. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geron and Therasense.
Diversification Opportunities for Geron and Therasense
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Geron and Therasense is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Geron and Therasense in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Therasense 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 Therasense. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Therasense has no effect on the direction of Geron i.e., Geron and Therasense go up and down completely randomly.
Pair Corralation between Geron and Therasense
Given the investment horizon of 90 days Geron is expected to generate 0.51 times more return on investment than Therasense. However, Geron is 1.95 times less risky than Therasense. It trades about 0.04 of its potential returns per unit of risk. Therasense is currently generating about 0.01 per unit of risk. If you would invest 236.00 in Geron on September 3, 2024 and sell it today you would earn a total of 176.00 from holding Geron or generate 74.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geron vs. Therasense
Performance |
| Timeline |
| Geron |
| Therasense |
Geron and Therasense Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geron and Therasense
The main advantage of trading using opposite Geron and Therasense positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geron position performs unexpectedly, Therasense 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 Therasense will offset losses from the drop in Therasense's long position.| Geron vs. Viking Therapeutics | Geron vs. TG Therapeutics | Geron vs. X4 Pharmaceuticals | Geron vs. PDS Biotechnology Corp |
| Therasense vs. Therapeutic Solutions International | Therasense vs. Alpha Cognition | Therasense vs. Regen BioPharma | Therasense vs. Vg Life Sciences |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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