Correlation Between GH Research and Wesana Health
Can any of the company-specific risk be diversified away by investing in both GH Research and Wesana Health 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 Wesana Health 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 Wesana Health Holdings, you can compare the effects of market volatilities on GH Research and Wesana Health 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 Wesana Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of GH Research and Wesana Health.
Diversification Opportunities for GH Research and Wesana Health
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GHRS and Wesana is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding GH Research PLC and Wesana Health Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesana Health Holdings 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 Wesana Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesana Health Holdings has no effect on the direction of GH Research i.e., GH Research and Wesana Health go up and down completely randomly.
Pair Corralation between GH Research and Wesana Health
Given the investment horizon of 90 days GH Research is expected to generate 1.94 times less return on investment than Wesana Health. But when comparing it to its historical volatility, GH Research PLC is 2.36 times less risky than Wesana Health. It trades about 0.16 of its potential returns per unit of risk. Wesana Health Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 6.75 in Wesana Health Holdings on November 27, 2024 and sell it today you would lose (0.75) from holding Wesana Health Holdings or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GH Research PLC vs. Wesana Health Holdings
Performance |
| Timeline |
| GH Research PLC |
| Wesana Health Holdings |
GH Research and Wesana Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GH Research and Wesana Health
The main advantage of trading using opposite GH Research and Wesana Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GH Research position performs unexpectedly, Wesana Health 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 Wesana Health will offset losses from the drop in Wesana Health's long position.| GH Research vs. Molecular Partners AG | GH Research vs. MediciNova | GH Research vs. Anebulo Pharmaceuticals | GH Research vs. Champions Oncology |
| Wesana Health vs. Revelation Biosciences | Wesana Health vs. Awakn Life Sciences | Wesana Health vs. HAVN Life Sciences | Wesana Health vs. Silo Pharma |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |