Correlation Between GH Research and Annexon
Can any of the company-specific risk be diversified away by investing in both GH Research and Annexon 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 GH Research and Annexon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GH Research PLC and Annexon, you can compare the effects of market volatilities on GH Research and Annexon 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 GH Research with a short position of Annexon. Check out your portfolio center. Please also check ongoing floating volatility patterns of GH Research and Annexon.
Diversification Opportunities for GH Research and Annexon
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GHRS and Annexon is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding GH Research PLC and Annexon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Annexon and GH Research 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 GH Research PLC are associated (or correlated) with Annexon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Annexon has no effect on the direction of GH Research i.e., GH Research and Annexon go up and down completely randomly.
Pair Corralation between GH Research and Annexon
Given the investment horizon of 90 days GH Research is expected to generate 3.63 times less return on investment than Annexon. But when comparing it to its historical volatility, GH Research PLC is 1.41 times less risky than Annexon. It trades about 0.01 of its potential returns per unit of risk. Annexon is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 542.00 in Annexon on September 3, 2024 and sell it today you would lose (3.00) from holding Annexon or give up 0.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GH Research PLC vs. Annexon
Performance |
| Timeline |
| GH Research PLC |
| Annexon |
GH Research and Annexon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GH Research and Annexon
The main advantage of trading using opposite GH Research and Annexon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GH Research position performs unexpectedly, Annexon 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 Annexon will offset losses from the drop in Annexon's long position.| GH Research vs. DiaMedica Therapeutics | GH Research vs. Lyra Therapeutics | GH Research vs. Centessa Pharmaceuticals PLC |
| Annexon vs. Immix Biopharma | Annexon vs. Cns Pharmaceuticals | Annexon vs. Hepion Pharmaceuticals | Annexon vs. Day One Biopharmaceuticals |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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