Correlation Between GH Research and Axim Biotechnologies
Can any of the company-specific risk be diversified away by investing in both GH Research and Axim Biotechnologies 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 Axim Biotechnologies 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 Axim Biotechnologies, you can compare the effects of market volatilities on GH Research and Axim Biotechnologies 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 Axim Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of GH Research and Axim Biotechnologies.
Diversification Opportunities for GH Research and Axim Biotechnologies
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GHRS and Axim is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding GH Research PLC and Axim Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axim Biotechnologies 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 Axim Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axim Biotechnologies has no effect on the direction of GH Research i.e., GH Research and Axim Biotechnologies go up and down completely randomly.
Pair Corralation between GH Research and Axim Biotechnologies
Given the investment horizon of 90 days GH Research PLC is expected to generate 1.24 times more return on investment than Axim Biotechnologies. However, GH Research is 1.24 times more volatile than Axim Biotechnologies. It trades about 0.16 of its potential returns per unit of risk. Axim Biotechnologies is currently generating about 0.13 per unit of risk. If you would invest 881.00 in GH Research PLC on November 27, 2024 and sell it today you would earn a total of 340.00 from holding GH Research PLC or generate 38.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GH Research PLC vs. Axim Biotechnologies
Performance |
| Timeline |
| GH Research PLC |
| Axim Biotechnologies |
GH Research and Axim Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GH Research and Axim Biotechnologies
The main advantage of trading using opposite GH Research and Axim Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GH Research position performs unexpectedly, Axim Biotechnologies 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 Axim Biotechnologies will offset losses from the drop in Axim Biotechnologies' long position.| GH Research vs. Molecular Partners AG | GH Research vs. MediciNova | GH Research vs. Anebulo Pharmaceuticals | GH Research vs. Champions Oncology |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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