Correlation Between GH Research and Decibel Therapeutics
Can any of the company-specific risk be diversified away by investing in both GH Research and Decibel 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 GH Research and Decibel Therapeutics 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 Decibel Therapeutics, you can compare the effects of market volatilities on GH Research and Decibel 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 GH Research with a short position of Decibel Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of GH Research and Decibel Therapeutics.
Diversification Opportunities for GH Research and Decibel Therapeutics
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between GHRS and Decibel is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding GH Research PLC and Decibel Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Decibel Therapeutics 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 Decibel Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Decibel Therapeutics has no effect on the direction of GH Research i.e., GH Research and Decibel Therapeutics go up and down completely randomly.
Pair Corralation between GH Research and Decibel Therapeutics
If you would invest 709.00 in GH Research PLC on October 25, 2024 and sell it today you would earn a total of 171.00 from holding GH Research PLC or generate 24.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.56% |
| Values | Daily Returns |
GH Research PLC vs. Decibel Therapeutics
Performance |
| Timeline |
| GH Research PLC |
| Decibel Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GH Research and Decibel Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GH Research and Decibel Therapeutics
The main advantage of trading using opposite GH Research and Decibel Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GH Research position performs unexpectedly, Decibel 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 Decibel Therapeutics will offset losses from the drop in Decibel Therapeutics' long position.| GH Research vs. Molecular Partners AG | GH Research vs. MediciNova | GH Research vs. Anebulo Pharmaceuticals | GH Research vs. Champions Oncology |
| Decibel Therapeutics vs. Werewolf Therapeutics | Decibel Therapeutics vs. Edgewise Therapeutics | Decibel Therapeutics vs. Celcuity LLC | Decibel Therapeutics vs. C4 Therapeutics |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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