Correlation Between Transgene and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both Transgene and NYSE Composite 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 Transgene and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transgene SA and NYSE Composite, you can compare the effects of market volatilities on Transgene and NYSE Composite 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 Transgene with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transgene and NYSE Composite.
Diversification Opportunities for Transgene and NYSE Composite
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Transgene and NYSE is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Transgene SA and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Transgene 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 Transgene SA are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Transgene i.e., Transgene and NYSE Composite go up and down completely randomly.
Pair Corralation between Transgene and NYSE Composite
Assuming the 90 days trading horizon Transgene SA is expected to generate 6.13 times more return on investment than NYSE Composite. However, Transgene is 6.13 times more volatile than NYSE Composite. It trades about 0.1 of its potential returns per unit of risk. NYSE Composite is currently generating about -0.16 per unit of risk. If you would invest 113.00 in Transgene SA on February 3, 2024 and sell it today you would earn a total of 9.00 from holding Transgene SA or generate 7.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
Transgene SA vs. NYSE Composite
Performance |
Timeline |
Transgene and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Transgene SA
Pair trading matchups for Transgene
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Transgene and NYSE Composite
The main advantage of trading using opposite Transgene and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transgene position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.Transgene vs. Abivax SA | Transgene vs. DBV Technologies SA | Transgene vs. Innate Pharma | Transgene vs. Genfit |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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