Correlation Between Enzo Biochem and Genetron Holdings

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

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

Diversification Opportunities for Enzo Biochem and Genetron Holdings

-0.06

Correlation Coefficient

Enzo Biochem  Genetron Holdings

Good diversification

The 3 months correlation between Enzo and Genetron is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Enzo Biochem and Genetron Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genetron Holdings and Enzo Biochem 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 Enzo Biochem are associated (or correlated) with Genetron Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genetron Holdings has no effect on the direction of Enzo Biochem i.e., Enzo Biochem and Genetron Holdings go up and down completely randomly.

Pair Corralation between Enzo Biochem and Genetron Holdings

Considering the 90-day investment horizon Enzo Biochem is expected to generate 1.62 times more return on investment than Genetron Holdings. However, Enzo Biochem is 1.62 times more volatile than Genetron Holdings. It trades about 0.0 of its potential returns per unit of risk. Genetron Holdings is currently generating about 0.0 per unit of risk. If you would invest  169.00  in Enzo Biochem on September 2, 2024 and sell it today you would lose (61.00) from holding Enzo Biochem or give up 36.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	31.05%
Values	Daily Returns

Enzo Biochem  vs.  Genetron Holdings

Enzo Biochem

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Enzo Biochem are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Enzo Biochem is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Genetron Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genetron Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Genetron Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Enzo Biochem and Genetron Holdings

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

The idea behind Enzo Biochem and Genetron Holdings 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.