Correlation Between PFA Invest and Genmab AS
Can any of the company-specific risk be diversified away by investing in both PFA 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 PFA 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 PFA Invest Danske and Genmab AS, you can compare the effects of market volatilities on PFA 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 PFA Invest with a short position of Genmab AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PFA Invest and Genmab AS.
Diversification Opportunities for PFA Invest and Genmab AS
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PFA and Genmab is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding PFA Invest Danske and Genmab AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genmab AS and PFA 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 PFA Invest Danske 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 PFA Invest i.e., PFA Invest and Genmab AS go up and down completely randomly.
Pair Corralation between PFA Invest and Genmab AS
Assuming the 90 days trading horizon PFA Invest Danske is expected to generate 0.45 times more return on investment than Genmab AS. However, PFA Invest Danske is 2.23 times less risky than Genmab AS. It trades about -0.13 of its potential returns per unit of risk. Genmab AS is currently generating about -0.3 per unit of risk. If you would invest 16,232 in PFA Invest Danske on January 26, 2024 and sell it today you would lose (232.00) from holding PFA Invest Danske or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PFA Invest Danske vs. Genmab AS
Performance |
| Timeline |
| PFA Invest Danske |
| Genmab AS |
PFA Invest and Genmab AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PFA Invest and Genmab AS
The main advantage of trading using opposite PFA Invest and Genmab AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PFA 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.| PFA Invest vs. Novo Nordisk AS | PFA Invest vs. Nordea Bank Abp | PFA Invest vs. DSV Panalpina AS | PFA Invest vs. AP Mller |
| Genmab AS vs. Ambu AS | Genmab AS vs. DSV Panalpina AS | Genmab AS vs. Bavarian Nordic | Genmab AS vs. GN Store Nord |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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