Correlation Between Purple Biotech and Genmab AS
Can any of the company-specific risk be diversified away by investing in both Purple Biotech 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 Purple Biotech and Genmab AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Purple Biotech and Genmab AS, you can compare the effects of market volatilities on Purple Biotech 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 Purple Biotech with a short position of Genmab AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Purple Biotech and Genmab AS.
Diversification Opportunities for Purple Biotech and Genmab AS
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Purple and Genmab is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Purple Biotech and Genmab AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genmab AS and Purple 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 Purple Biotech 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 Purple Biotech i.e., Purple Biotech and Genmab AS go up and down completely randomly.
Pair Corralation between Purple Biotech and Genmab AS
Given the investment horizon of 90 days Purple Biotech is expected to generate 3.65 times more return on investment than Genmab AS. However, Purple Biotech is 3.65 times more volatile than Genmab AS. It trades about 0.0 of its potential returns per unit of risk. Genmab AS is currently generating about -0.05 per unit of risk. If you would invest 3,220 in Purple Biotech on September 3, 2024 and sell it today you would lose (2,380) from holding Purple Biotech or give up 73.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Purple Biotech vs. Genmab AS
Performance |
| Timeline |
| Purple Biotech |
| Genmab AS |
Purple Biotech and Genmab AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Purple Biotech and Genmab AS
The main advantage of trading using opposite Purple Biotech and Genmab AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Purple Biotech 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.| Purple Biotech vs. Pluri Inc | Purple Biotech vs. BioLineRx | Purple Biotech vs. Enlivex Therapeutics | Purple Biotech vs. Anebulo Pharmaceuticals |
| Genmab AS vs. Inhibikase Therapeutics | Genmab AS vs. Purple Biotech | Genmab AS vs. Synaptogenix | Genmab AS vs. Legend Biotech 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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