Correlation Between Genmab AS and DiaMedica Therapeutics
Can any of the company-specific risk be diversified away by investing in both Genmab AS and DiaMedica 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 Genmab AS and DiaMedica Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genmab AS and DiaMedica Therapeutics, you can compare the effects of market volatilities on Genmab AS and DiaMedica 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 Genmab AS with a short position of DiaMedica Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genmab AS and DiaMedica Therapeutics.
Diversification Opportunities for Genmab AS and DiaMedica Therapeutics
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Genmab and DiaMedica is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Genmab AS and DiaMedica Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DiaMedica Therapeutics 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 DiaMedica Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DiaMedica Therapeutics has no effect on the direction of Genmab AS i.e., Genmab AS and DiaMedica Therapeutics go up and down completely randomly.
Pair Corralation between Genmab AS and DiaMedica Therapeutics
Given the investment horizon of 90 days Genmab AS is expected to under-perform the DiaMedica Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Genmab AS is 2.8 times less risky than DiaMedica Therapeutics. The stock trades about -0.12 of its potential returns per unit of risk. The DiaMedica Therapeutics is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 350.00 in DiaMedica Therapeutics on September 3, 2024 and sell it today you would earn a total of 216.00 from holding DiaMedica Therapeutics or generate 61.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genmab AS vs. DiaMedica Therapeutics
Performance |
| Timeline |
| Genmab AS |
| DiaMedica Therapeutics |
Genmab AS and DiaMedica Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genmab AS and DiaMedica Therapeutics
The main advantage of trading using opposite Genmab AS and DiaMedica Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genmab AS position performs unexpectedly, DiaMedica 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 DiaMedica Therapeutics will offset losses from the drop in DiaMedica Therapeutics' long position.| Genmab AS vs. DiaMedica Therapeutics | Genmab AS vs. Lyra Therapeutics | Genmab AS vs. Centessa Pharmaceuticals PLC |
| DiaMedica Therapeutics vs. Milestone Pharmaceuticals | DiaMedica Therapeutics vs. Seres Therapeutics | DiaMedica Therapeutics vs. Inhibikase Therapeutics | DiaMedica Therapeutics vs. Oncolytics Biotech |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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