Correlation Between Scpharmaceuticals and Genmab AS
Can any of the company-specific risk be diversified away by investing in both Scpharmaceuticals 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 Scpharmaceuticals and Genmab AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scpharmaceuticals and Genmab AS, you can compare the effects of market volatilities on Scpharmaceuticals 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 Scpharmaceuticals with a short position of Genmab AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scpharmaceuticals and Genmab AS.
Diversification Opportunities for Scpharmaceuticals and Genmab AS
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Scpharmaceuticals and Genmab is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Scpharmaceuticals and Genmab AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genmab AS and Scpharmaceuticals 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 Scpharmaceuticals 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 Scpharmaceuticals i.e., Scpharmaceuticals and Genmab AS go up and down completely randomly.
Pair Corralation between Scpharmaceuticals and Genmab AS
Given the investment horizon of 90 days Scpharmaceuticals is expected to generate 2.23 times more return on investment than Genmab AS. However, Scpharmaceuticals is 2.23 times more volatile than Genmab AS. It trades about -0.01 of its potential returns per unit of risk. Genmab AS is currently generating about -0.07 per unit of risk. If you would invest 684.00 in Scpharmaceuticals on August 29, 2024 and sell it today you would lose (310.00) from holding Scpharmaceuticals or give up 45.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scpharmaceuticals vs. Genmab AS
Performance |
| Timeline |
| Scpharmaceuticals |
| Genmab AS |
Scpharmaceuticals and Genmab AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scpharmaceuticals and Genmab AS
The main advantage of trading using opposite Scpharmaceuticals and Genmab AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scpharmaceuticals 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.| Scpharmaceuticals vs. Milestone Pharmaceuticals | Scpharmaceuticals vs. Oncolytics Biotech | Scpharmaceuticals vs. Seres Therapeutics | Scpharmaceuticals vs. DiaMedica Therapeutics |
| Genmab AS vs. Ascendis Pharma AS | Genmab AS vs. Apellis Pharmaceuticals | Genmab AS vs. BeiGene | Genmab AS vs. Akero Therapeutics |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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