Correlation Between Zenith Capital and Gain Therapeutics
Can any of the company-specific risk be diversified away by investing in both Zenith Capital and Gain Therapeutics 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 Zenith Capital and Gain Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zenith Capital Corp and Gain Therapeutics, you can compare the effects of market volatilities on Zenith Capital and Gain Therapeutics 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 Zenith Capital with a short position of Gain Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zenith Capital and Gain Therapeutics.
Diversification Opportunities for Zenith Capital and Gain Therapeutics
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zenith and Gain is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Zenith Capital Corp and Gain Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gain Therapeutics and Zenith Capital 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 Zenith Capital Corp are associated (or correlated) with Gain Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gain Therapeutics has no effect on the direction of Zenith Capital i.e., Zenith Capital and Gain Therapeutics go up and down completely randomly.
Pair Corralation between Zenith Capital and Gain Therapeutics
Assuming the 90 days horizon Zenith Capital Corp is expected to generate 33.01 times more return on investment than Gain Therapeutics. However, Zenith Capital is 33.01 times more volatile than Gain Therapeutics. It trades about 0.19 of its potential returns per unit of risk. Gain Therapeutics is currently generating about -0.21 per unit of risk. If you would invest 8.00 in Zenith Capital Corp on September 1, 2024 and sell it today you would earn a total of 3.00 from holding Zenith Capital Corp or generate 37.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Zenith Capital Corp vs. Gain Therapeutics
Performance |
| Timeline |
| Zenith Capital Corp |
| Gain Therapeutics |
Zenith Capital and Gain Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zenith Capital and Gain Therapeutics
The main advantage of trading using opposite Zenith Capital and Gain Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zenith Capital position performs unexpectedly, Gain Therapeutics 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 Gain Therapeutics will offset losses from the drop in Gain Therapeutics' long position.| Zenith Capital vs. Rigel Pharmaceuticals | Zenith Capital vs. Geron | Zenith Capital vs. Verastem | Zenith Capital vs. Immutep Ltd ADR |
| Gain Therapeutics vs. Tff Pharmaceuticals | Gain Therapeutics vs. Eliem Therapeutics | Gain Therapeutics vs. Inhibrx | Gain Therapeutics vs. Enliven 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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