Correlation Between Transgene and AbL Diagnostics
Can any of the company-specific risk be diversified away by investing in both Transgene and AbL Diagnostics 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 Transgene and AbL Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transgene SA and AbL Diagnostics SA, you can compare the effects of market volatilities on Transgene and AbL Diagnostics 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 Transgene with a short position of AbL Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transgene and AbL Diagnostics.
Diversification Opportunities for Transgene and AbL Diagnostics
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Transgene and AbL is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Transgene SA and AbL Diagnostics SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbL Diagnostics SA and Transgene 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 Transgene SA are associated (or correlated) with AbL Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbL Diagnostics SA has no effect on the direction of Transgene i.e., Transgene and AbL Diagnostics go up and down completely randomly.
Pair Corralation between Transgene and AbL Diagnostics
Assuming the 90 days trading horizon Transgene is expected to generate 19.84 times less return on investment than AbL Diagnostics. But when comparing it to its historical volatility, Transgene SA is 1.55 times less risky than AbL Diagnostics. It trades about 0.07 of its potential returns per unit of risk. AbL Diagnostics SA is currently generating about 0.93 of returns per unit of risk over similar time horizon. If you would invest 304.00 in AbL Diagnostics SA on November 28, 2024 and sell it today you would earn a total of 276.00 from holding AbL Diagnostics SA or generate 90.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transgene SA vs. AbL Diagnostics SA
Performance |
| Timeline |
| Transgene SA |
| AbL Diagnostics SA |
Transgene and AbL Diagnostics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transgene and AbL Diagnostics
The main advantage of trading using opposite Transgene and AbL Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transgene position performs unexpectedly, AbL Diagnostics 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 AbL Diagnostics will offset losses from the drop in AbL Diagnostics' long position.| Transgene vs. Innate Pharma | Transgene vs. Nanobiotix SA | Transgene vs. Genfit | Transgene vs. AB Science SA |
| AbL Diagnostics vs. Acticor Biotech SAS | AbL Diagnostics vs. CMG Cleantech SA | AbL Diagnostics vs. FNP Technologies SA | AbL Diagnostics vs. Diagnostic Medical Systems |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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