Correlation Between Genscript Biotech and Innovent Biologics
Can any of the company-specific risk be diversified away by investing in both Genscript Biotech and Innovent Biologics 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 Genscript Biotech and Innovent Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genscript Biotech and Innovent Biologics, you can compare the effects of market volatilities on Genscript Biotech and Innovent Biologics 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 Genscript Biotech with a short position of Innovent Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genscript Biotech and Innovent Biologics.
Diversification Opportunities for Genscript Biotech and Innovent Biologics
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Genscript and Innovent is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Genscript Biotech and Innovent Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovent Biologics and Genscript Biotech 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 Genscript Biotech are associated (or correlated) with Innovent Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovent Biologics has no effect on the direction of Genscript Biotech i.e., Genscript Biotech and Innovent Biologics go up and down completely randomly.
Pair Corralation between Genscript Biotech and Innovent Biologics
Assuming the 90 days horizon Genscript Biotech is expected to generate 0.64 times more return on investment than Innovent Biologics. However, Genscript Biotech is 1.56 times less risky than Innovent Biologics. It trades about -0.02 of its potential returns per unit of risk. Innovent Biologics is currently generating about -0.02 per unit of risk. If you would invest 140.00 in Genscript Biotech on August 29, 2024 and sell it today you would lose (3.00) from holding Genscript Biotech or give up 2.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genscript Biotech vs. Innovent Biologics
Performance |
| Timeline |
| Genscript Biotech |
| Innovent Biologics |
Genscript Biotech and Innovent Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genscript Biotech and Innovent Biologics
The main advantage of trading using opposite Genscript Biotech and Innovent Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genscript Biotech position performs unexpectedly, Innovent Biologics 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 Innovent Biologics will offset losses from the drop in Innovent Biologics' long position.| Genscript Biotech vs. Telix Pharmaceuticals Limited | Genscript Biotech vs. Keros Therapeutics | Genscript Biotech vs. Zentalis Pharmaceuticals Llc | Genscript Biotech vs. Innovent Biologics |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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