Correlation Between Alfi and Genmab AS

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Can any of the company-specific risk be diversified away by investing in both Alfi and Genmab 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 Alfi and Genmab AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfi Inc and Genmab AS, you can compare the effects of market volatilities on Alfi and Genmab 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 Alfi with a short position of Genmab AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfi and Genmab AS.

Diversification Opportunities for Alfi and Genmab AS

-0.79
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Alfi and Genmab is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Alfi Inc and Genmab AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genmab AS and Alfi 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 Alfi Inc are associated (or correlated) with Genmab AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genmab AS has no effect on the direction of Alfi i.e., Alfi and Genmab AS go up and down completely randomly.

Pair Corralation between Alfi and Genmab AS

Considering the 90-day investment horizon Alfi Inc is expected to under-perform the Genmab AS. In addition to that, Alfi is 5.89 times more volatile than Genmab AS. It trades about -0.02 of its total potential returns per unit of risk. Genmab AS is currently generating about 0.02 per unit of volatility. If you would invest  4,023  in Genmab AS on September 9, 2022 and sell it today you would earn a total of  549.00  from holding Genmab AS or generate 13.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy81.65%
ValuesDaily Returns

Alfi Inc  vs.  Genmab AS

 Performance (%) 
       Timeline  
Alfi Inc 
Alfi Performance
0 of 100
Over the last 90 days Alfi Inc 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 essential indicators remain rather sound which may send shares a bit higher in January 2023. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Alfi Price Channel

Genmab AS 
Genmab Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Genmab AS are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Genmab AS sustained solid returns over the last few months and may actually be approaching a breakup point.

Genmab Price Channel

Alfi and Genmab AS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alfi and Genmab AS

The main advantage of trading using opposite Alfi and Genmab AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfi position performs unexpectedly, Genmab 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 Genmab AS will offset losses from the drop in Genmab AS's long position.
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The idea behind Alfi Inc and Genmab 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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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 Watchlist Optimization module to optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm.

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