Correlation Between Madrigal Pharmaceuticals and Genmab AS
Can any of the company-specific risk be diversified away by investing in both Madrigal Pharmaceuticals and Genmab AS 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 Madrigal Pharmaceuticals and Genmab AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Madrigal Pharmaceuticals and Genmab AS, you can compare the effects of market volatilities on Madrigal Pharmaceuticals and Genmab AS 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 Madrigal Pharmaceuticals with a short position of Genmab AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Madrigal Pharmaceuticals and Genmab AS.
Diversification Opportunities for Madrigal Pharmaceuticals and Genmab AS
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Madrigal and Genmab is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Madrigal Pharmaceuticals and Genmab AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genmab AS and Madrigal Pharmaceuticals 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 Madrigal Pharmaceuticals are associated (or correlated) with Genmab AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genmab AS has no effect on the direction of Madrigal Pharmaceuticals i.e., Madrigal Pharmaceuticals and Genmab AS go up and down completely randomly.
Pair Corralation between Madrigal Pharmaceuticals and Genmab AS
Given the investment horizon of 90 days Madrigal Pharmaceuticals is expected to generate 6.78 times more return on investment than Genmab AS. However, Madrigal Pharmaceuticals is 6.78 times more volatile than Genmab AS. It trades about 0.05 of its potential returns per unit of risk. Genmab AS is currently generating about -0.08 per unit of risk. If you would invest 6,631 in Madrigal Pharmaceuticals on August 27, 2024 and sell it today you would earn a total of 28,114 from holding Madrigal Pharmaceuticals or generate 423.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Madrigal Pharmaceuticals vs. Genmab AS
Performance |
| Timeline |
| Madrigal Pharmaceuticals |
| Genmab AS |
Madrigal Pharmaceuticals and Genmab AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Madrigal Pharmaceuticals and Genmab AS
The main advantage of trading using opposite Madrigal Pharmaceuticals and Genmab AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Madrigal Pharmaceuticals position performs unexpectedly, Genmab AS 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 Genmab AS will offset losses from the drop in Genmab AS's long position.| Madrigal Pharmaceuticals vs. Eliem Therapeutics | Madrigal Pharmaceuticals vs. HCW Biologics | Madrigal Pharmaceuticals vs. Scpharmaceuticals | Madrigal Pharmaceuticals vs. Milestone Pharmaceuticals |
| Genmab AS vs. Eliem Therapeutics | Genmab AS vs. HCW Biologics | Genmab AS vs. Scpharmaceuticals | Genmab AS vs. Milestone 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |