Correlation Between Fundamental Invest and Genmab AS
Can any of the company-specific risk be diversified away by investing in both Fundamental Invest 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 Fundamental Invest and Genmab AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fundamental Invest and Genmab AS, you can compare the effects of market volatilities on Fundamental Invest 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 Fundamental Invest with a short position of Genmab AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fundamental Invest and Genmab AS.
Diversification Opportunities for Fundamental Invest and Genmab AS
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fundamental and Genmab is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Invest and Genmab AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genmab AS and Fundamental Invest 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 Fundamental Invest 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 Fundamental Invest i.e., Fundamental Invest and Genmab AS go up and down completely randomly.
Pair Corralation between Fundamental Invest and Genmab AS
Assuming the 90 days trading horizon Fundamental Invest is expected to generate 0.48 times more return on investment than Genmab AS. However, Fundamental Invest is 2.07 times less risky than Genmab AS. It trades about 0.12 of its potential returns per unit of risk. Genmab AS is currently generating about 0.03 per unit of risk. If you would invest 28,435 in Fundamental Invest on January 20, 2024 and sell it today you would earn a total of 1,955 from holding Fundamental Invest or generate 6.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fundamental Invest vs. Genmab AS
Performance |
| Timeline |
| Fundamental Invest |
| Genmab AS |
Fundamental Invest and Genmab AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fundamental Invest and Genmab AS
The main advantage of trading using opposite Fundamental Invest and Genmab AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundamental Invest 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.| Fundamental Invest vs. Novo Nordisk AS | Fundamental Invest vs. Nordea Bank Abp | Fundamental Invest vs. DSV Panalpina AS | Fundamental Invest vs. AP Mller |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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