Correlation Between Generation Bio and Tff Pharmaceuticals

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

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

Diversification Opportunities for Generation Bio and Tff Pharmaceuticals

-0.04

Correlation Coefficient

Generation Bio  Tff Pharmaceuticals

Good diversification

The 3 months correlation between Generation and Tff is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Generation Bio Co and Tff Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tff Pharmaceuticals and Generation Bio 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 Generation Bio Co are associated (or correlated) with Tff Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tff Pharmaceuticals has no effect on the direction of Generation Bio i.e., Generation Bio and Tff Pharmaceuticals go up and down completely randomly.

Pair Corralation between Generation Bio and Tff Pharmaceuticals

Given the investment horizon of 90 days Generation Bio Co is expected to generate 1.32 times more return on investment than Tff Pharmaceuticals. However, Generation Bio is 1.32 times more volatile than Tff Pharmaceuticals. It trades about -0.02 of its potential returns per unit of risk. Tff Pharmaceuticals is currently generating about -0.03 per unit of risk. If you would invest  335.00  in Generation Bio Co on March 7, 2024 and sell it today you would lose (23.00) from holding Generation Bio Co or give up 6.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Generation Bio Co  vs.  Tff Pharmaceuticals

Generation Bio

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Generation Bio Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal forward indicators, Generation Bio displayed solid returns over the last few months and may actually be approaching a breakup point.

Tff Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tff Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in July 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Generation Bio and Tff Pharmaceuticals

The main advantage of trading using opposite Generation Bio and Tff Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generation Bio position performs unexpectedly, Tff Pharmaceuticals 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 Tff Pharmaceuticals will offset losses from the drop in Tff Pharmaceuticals' long position.

The idea behind Generation Bio Co and Tff Pharmaceuticals 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..