Correlation Between GH Research and Revelation Biosciences
Can any of the company-specific risk be diversified away by investing in both GH Research and Revelation Biosciences 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 Revelation Biosciences 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 Revelation Biosciences, you can compare the effects of market volatilities on GH Research and Revelation Biosciences 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 Revelation Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of GH Research and Revelation Biosciences.
Diversification Opportunities for GH Research and Revelation Biosciences
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between GHRS and Revelation is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding GH Research PLC and Revelation Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revelation Biosciences 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 Revelation Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revelation Biosciences has no effect on the direction of GH Research i.e., GH Research and Revelation Biosciences go up and down completely randomly.
Pair Corralation between GH Research and Revelation Biosciences
Given the investment horizon of 90 days GH Research PLC is expected to under-perform the Revelation Biosciences. But the stock apears to be less risky and, when comparing its historical volatility, GH Research PLC is 1.86 times less risky than Revelation Biosciences. The stock trades about -0.01 of its potential returns per unit of risk. The Revelation Biosciences is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1.39 in Revelation Biosciences on September 2, 2024 and sell it today you would lose (0.17) from holding Revelation Biosciences or give up 12.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GH Research PLC vs. Revelation Biosciences
Performance |
| Timeline |
| GH Research PLC |
| Revelation Biosciences |
GH Research and Revelation Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GH Research and Revelation Biosciences
The main advantage of trading using opposite GH Research and Revelation Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GH Research position performs unexpectedly, Revelation Biosciences 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 Revelation Biosciences will offset losses from the drop in Revelation Biosciences' long position.| GH Research vs. Tff Pharmaceuticals | GH Research vs. Eliem Therapeutics | GH Research vs. Inhibrx | GH Research vs. Enliven Therapeutics |
| Revelation Biosciences vs. Revelation Biosciences | Revelation Biosciences vs. SAB Biotherapeutics | Revelation Biosciences vs. Surrozen Warrant | Revelation Biosciences vs. Jasper 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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