Correlation Between Genmab AS and Atea Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Genmab AS and Atea Pharmaceuticals 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 Atea Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genmab AS and Atea Pharmaceuticals, you can compare the effects of market volatilities on Genmab AS and Atea Pharmaceuticals 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 Atea Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genmab AS and Atea Pharmaceuticals.
Diversification Opportunities for Genmab AS and Atea Pharmaceuticals
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Genmab and Atea is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Genmab AS and Atea Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atea Pharmaceuticals 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 Atea Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atea Pharmaceuticals has no effect on the direction of Genmab AS i.e., Genmab AS and Atea Pharmaceuticals go up and down completely randomly.
Pair Corralation between Genmab AS and Atea Pharmaceuticals
Given the investment horizon of 90 days Genmab AS is expected to under-perform the Atea Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Genmab AS is 1.51 times less risky than Atea Pharmaceuticals. The stock trades about -0.25 of its potential returns per unit of risk. The Atea Pharmaceuticals is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 338.00 in Atea Pharmaceuticals on August 25, 2024 and sell it today you would lose (1.00) from holding Atea Pharmaceuticals or give up 0.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genmab AS vs. Atea Pharmaceuticals
Performance |
| Timeline |
| Genmab AS |
| Atea Pharmaceuticals |
Genmab AS and Atea Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genmab AS and Atea Pharmaceuticals
The main advantage of trading using opposite Genmab AS and Atea Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genmab AS position performs unexpectedly, Atea Pharmaceuticals 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 Atea Pharmaceuticals will offset losses from the drop in Atea Pharmaceuticals' long position.| Genmab AS vs. Eliem Therapeutics | Genmab AS vs. HCW Biologics | Genmab AS vs. Scpharmaceuticals | Genmab AS vs. Milestone Pharmaceuticals |
| Atea Pharmaceuticals vs. Immix Biopharma | Atea Pharmaceuticals vs. Cns Pharmaceuticals | Atea Pharmaceuticals vs. Hepion Pharmaceuticals | Atea Pharmaceuticals vs. Enveric Biosciences |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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