Correlation Between Bitcoin and Genmab AS

Can any of the company-specific risk be diversified away by investing in both Bitcoin 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 Bitcoin and Genmab AS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bitcoin and Genmab AS, you can compare the effects of market volatilities on Bitcoin 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 Bitcoin with a short position of Genmab AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Genmab AS.

Diversification Opportunities for Bitcoin and Genmab AS

0.67

Correlation Coefficient

Bitcoin  Genmab AS

Poor diversification

The 3 months correlation between Bitcoin and Genmab is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Genmab AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genmab AS and Bitcoin 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 Bitcoin 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 Bitcoin i.e., Bitcoin and Genmab AS go up and down completely randomly.

Pair Corralation between Bitcoin and Genmab AS

Assuming the 90 days trading horizon Bitcoin is expected to under-perform the Genmab AS. In addition to that, Bitcoin is 2.15 times more volatile than Genmab AS. It trades about -0.02 of its total potential returns per unit of risk. Genmab AS is currently generating about 0.0 per unit of volatility. If you would invest  200,900  in Genmab AS on January 20, 2024 and sell it today you would lose (300.00) from holding Genmab AS or give up 0.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	86.96%
Values	Daily Returns

Bitcoin  vs.  Genmab AS

Bitcoin

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Bitcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Genmab AS

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Genmab AS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Genmab AS is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Bitcoin and Genmab AS

The main advantage of trading using opposite Bitcoin and Genmab AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin 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.

The idea behind Bitcoin and Genmab AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.