Correlation Between Northwest Biotherapeutics and Geron
Can any of the company-specific risk be diversified away by investing in both Northwest Biotherapeutics and Geron 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 Northwest Biotherapeutics and Geron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northwest Biotherapeutics and Geron, you can compare the effects of market volatilities on Northwest Biotherapeutics and Geron 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 Northwest Biotherapeutics with a short position of Geron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northwest Biotherapeutics and Geron.
Diversification Opportunities for Northwest Biotherapeutics and Geron
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Northwest and Geron is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Northwest Biotherapeutics and Geron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geron and Northwest Biotherapeutics 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 Northwest Biotherapeutics are associated (or correlated) with Geron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geron has no effect on the direction of Northwest Biotherapeutics i.e., Northwest Biotherapeutics and Geron go up and down completely randomly.
Pair Corralation between Northwest Biotherapeutics and Geron
Given the investment horizon of 90 days Northwest Biotherapeutics is expected to under-perform the Geron. In addition to that, Northwest Biotherapeutics is 2.05 times more volatile than Geron. It trades about -0.08 of its total potential returns per unit of risk. Geron is currently generating about -0.06 per unit of volatility. If you would invest 422.00 in Geron on August 29, 2024 and sell it today you would lose (16.00) from holding Geron or give up 3.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northwest Biotherapeutics vs. Geron
Performance |
| Timeline |
| Northwest Biotherapeutics |
| Geron |
Northwest Biotherapeutics and Geron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northwest Biotherapeutics and Geron
The main advantage of trading using opposite Northwest Biotherapeutics and Geron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northwest Biotherapeutics position performs unexpectedly, Geron 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 Geron will offset losses from the drop in Geron's long position.The idea behind Northwest Biotherapeutics and Geron pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Geron vs. Viking Therapeutics | Geron vs. TG Therapeutics | Geron vs. X4 Pharmaceuticals | Geron vs. PDS Biotechnology Corp |
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.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |