Correlation Between Enlivex Therapeutics and Genscript Biotech

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

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

Diversification Opportunities for Enlivex Therapeutics and Genscript Biotech

0.26

Correlation Coefficient

Enlivex Therapeutics  Genscript Biotech

Modest diversification

The 3 months correlation between Enlivex and Genscript is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Enlivex Therapeutics and Genscript Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genscript Biotech and Enlivex Therapeutics 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 Enlivex Therapeutics are associated (or correlated) with Genscript Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genscript Biotech has no effect on the direction of Enlivex Therapeutics i.e., Enlivex Therapeutics and Genscript Biotech go up and down completely randomly.

Pair Corralation between Enlivex Therapeutics and Genscript Biotech

Given the investment horizon of 90 days Enlivex Therapeutics is expected to under-perform the Genscript Biotech. In addition to that, Enlivex Therapeutics is 2.53 times more volatile than Genscript Biotech. It trades about -0.04 of its total potential returns per unit of risk. Genscript Biotech is currently generating about -0.08 per unit of volatility. If you would invest  141.00  in Genscript Biotech on September 17, 2024 and sell it today you would lose (16.00) from holding Genscript Biotech or give up 11.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Enlivex Therapeutics  vs.  Genscript Biotech

Enlivex Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enlivex Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Genscript Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genscript Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Enlivex Therapeutics and Genscript Biotech

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

The idea behind Enlivex Therapeutics and Genscript Biotech 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.