Correlation Between Genmab AS and Purple Biotech
Can any of the company-specific risk be diversified away by investing in both Genmab AS and Purple Biotech 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 Purple Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genmab AS and Purple Biotech, you can compare the effects of market volatilities on Genmab AS and Purple Biotech 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 Purple Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genmab AS and Purple Biotech.
Diversification Opportunities for Genmab AS and Purple Biotech
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Genmab and Purple is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Genmab AS and Purple Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purple Biotech 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 Purple Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purple Biotech has no effect on the direction of Genmab AS i.e., Genmab AS and Purple Biotech go up and down completely randomly.
Pair Corralation between Genmab AS and Purple Biotech
Assuming the 90 days horizon Genmab AS is expected to under-perform the Purple Biotech. But the pink sheet apears to be less risky and, when comparing its historical volatility, Genmab AS is 7.5 times less risky than Purple Biotech. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Purple Biotech is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 410.00 in Purple Biotech on September 12, 2024 and sell it today you would earn a total of 1.00 from holding Purple Biotech or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.62% |
| Values | Daily Returns |
Genmab AS vs. Purple Biotech
Performance |
| Timeline |
| Genmab AS |
| Purple Biotech |
Genmab AS and Purple Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genmab AS and Purple Biotech
The main advantage of trading using opposite Genmab AS and Purple Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genmab AS position performs unexpectedly, Purple Biotech 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 Purple Biotech will offset losses from the drop in Purple Biotech's long position.| Genmab AS vs. Inhibikase Therapeutics | Genmab AS vs. Purple Biotech | Genmab AS vs. Synaptogenix | Genmab AS vs. Legend Biotech Corp |
| Purple Biotech vs. Pluri Inc | Purple Biotech vs. BioLineRx | Purple Biotech vs. Enlivex Therapeutics | Purple Biotech vs. Anebulo Pharmaceuticals |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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