Correlation Between Genetron Holdings and Twist Bioscience

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

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

Diversification Opportunities for Genetron Holdings and Twist Bioscience

-0.03

Correlation Coefficient

Genetron Holdings  Twist Bioscience

Good diversification

The 3 months correlation between Genetron and Twist is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Genetron Holdings and Twist Bioscience Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twist Bioscience Corp and Genetron Holdings 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 Genetron Holdings are associated (or correlated) with Twist Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twist Bioscience Corp has no effect on the direction of Genetron Holdings i.e., Genetron Holdings and Twist Bioscience go up and down completely randomly.

Pair Corralation between Genetron Holdings and Twist Bioscience

If you would invest  4,096  in Twist Bioscience Corp on September 2, 2024 and sell it today you would earn a total of  822.00  from holding Twist Bioscience Corp or generate 20.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Genetron Holdings  vs.  Twist Bioscience Corp

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.

Twist Bioscience Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Twist Bioscience Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Twist Bioscience unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genetron Holdings and Twist Bioscience

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

The idea behind Genetron Holdings and Twist Bioscience Corp 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.