Correlation Between Genmab AS and Edgewise Therapeutics
Can any of the company-specific risk be diversified away by investing in both Genmab AS and Edgewise 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 Edgewise 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 Edgewise Therapeutics, you can compare the effects of market volatilities on Genmab AS and Edgewise 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 Edgewise Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genmab AS and Edgewise Therapeutics.
Diversification Opportunities for Genmab AS and Edgewise Therapeutics
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Genmab and Edgewise is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Genmab AS and Edgewise Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgewise 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 Edgewise Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgewise Therapeutics has no effect on the direction of Genmab AS i.e., Genmab AS and Edgewise Therapeutics go up and down completely randomly.
Pair Corralation between Genmab AS and Edgewise Therapeutics
Given the investment horizon of 90 days Genmab AS is expected to under-perform the Edgewise Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Genmab AS is 1.25 times less risky than Edgewise Therapeutics. The stock trades about -0.07 of its potential returns per unit of risk. The Edgewise Therapeutics is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,670 in Edgewise Therapeutics on November 1, 2024 and sell it today you would earn a total of 144.00 from holding Edgewise Therapeutics or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genmab AS vs. Edgewise Therapeutics
Performance |
| Timeline |
| Genmab AS |
| Edgewise Therapeutics |
Genmab AS and Edgewise Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genmab AS and Edgewise Therapeutics
The main advantage of trading using opposite Genmab AS and Edgewise Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genmab AS position performs unexpectedly, Edgewise 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 Edgewise Therapeutics will offset losses from the drop in Edgewise Therapeutics' long position.| Genmab AS vs. Ascendis Pharma AS | Genmab AS vs. Apellis Pharmaceuticals | Genmab AS vs. Akero Therapeutics | Genmab AS vs. Blueprint Medicines Corp |
| Edgewise Therapeutics vs. Century Therapeutics | Edgewise Therapeutics vs. C4 Therapeutics | Edgewise Therapeutics vs. Mineralys Therapeutics, Common | Edgewise Therapeutics vs. Cullinan Oncology LLC |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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