Correlation Between Genmab AS and RTX AS

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

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

Diversification Opportunities for Genmab AS and RTX AS

0.7

Correlation Coefficient

Genmab AS  RTX AS

Poor diversification

The 3 months correlation between Genmab and RTX is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Genmab AS and RTX AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RTX AS and Genmab AS 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 Genmab AS are associated (or correlated) with RTX AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RTX AS has no effect on the direction of Genmab AS i.e., Genmab AS and RTX AS go up and down completely randomly.

Pair Corralation between Genmab AS and RTX AS

Assuming the 90 days trading horizon Genmab AS is expected to under-perform the RTX AS. But the stock apears to be less risky and, when comparing its historical volatility, Genmab AS is 1.56 times less risky than RTX AS. The stock trades about -0.08 of its potential returns per unit of risk. The RTX AS is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  7,020  in RTX AS on September 4, 2024 and sell it today you would lose (920.00) from holding RTX AS or give up 13.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Genmab AS  vs.  RTX AS

Genmab AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genmab AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

RTX AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RTX AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Genmab AS and RTX AS

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

The idea behind Genmab AS and RTX 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.