Correlation Between Genmab AS and Wirtek AS
Can any of the company-specific risk be diversified away by investing in both Genmab AS and Wirtek AS 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 Genmab AS and Wirtek AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genmab AS and Wirtek AS, you can compare the effects of market volatilities on Genmab AS and Wirtek AS 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 Genmab AS with a short position of Wirtek AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genmab AS and Wirtek AS.
Diversification Opportunities for Genmab AS and Wirtek AS
Poor diversification
The 3 months correlation between Genmab and Wirtek is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Genmab AS and Wirtek AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wirtek AS and Genmab AS 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 Genmab AS are associated (or correlated) with Wirtek AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wirtek AS has no effect on the direction of Genmab AS i.e., Genmab AS and Wirtek AS go up and down completely randomly.
Pair Corralation between Genmab AS and Wirtek AS
Assuming the 90 days trading horizon Genmab AS is expected to generate 0.98 times more return on investment than Wirtek AS. However, Genmab AS is 1.02 times less risky than Wirtek AS. It trades about 0.08 of its potential returns per unit of risk. Wirtek AS is currently generating about -0.48 per unit of risk. If you would invest 144,600 in Genmab AS on September 20, 2024 and sell it today you would earn a total of 4,050 from holding Genmab AS or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genmab AS vs. Wirtek AS
Performance |
| Timeline |
| Genmab AS |
| Wirtek AS |
Genmab AS and Wirtek AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genmab AS and Wirtek AS
The main advantage of trading using opposite Genmab AS and Wirtek AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genmab AS position performs unexpectedly, Wirtek AS 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 Wirtek AS will offset losses from the drop in Wirtek AS's long position.| Genmab AS vs. Ambu AS | Genmab AS vs. DSV Panalpina AS | Genmab AS vs. Bavarian Nordic | Genmab AS vs. GN Store Nord |
| Wirtek AS vs. ChemoMetec AS | Wirtek AS vs. Ambu AS | Wirtek AS vs. Genmab AS | Wirtek AS vs. Zealand Pharma AS |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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