Correlation Between Fractyl Health and EnGene Holdings

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

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

Diversification Opportunities for Fractyl Health and EnGene Holdings

0.64

Correlation Coefficient

Fractyl Health  EnGene Holdings

Poor diversification

The 3 months correlation between Fractyl and EnGene is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Fractyl Health Common and enGene Holdings Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enGene Holdings Common and Fractyl Health 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 Fractyl Health Common are associated (or correlated) with EnGene Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enGene Holdings Common has no effect on the direction of Fractyl Health i.e., Fractyl Health and EnGene Holdings go up and down completely randomly.

Pair Corralation between Fractyl Health and EnGene Holdings

Given the investment horizon of 90 days Fractyl Health Common is expected to under-perform the EnGene Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Fractyl Health Common is 1.03 times less risky than EnGene Holdings. The stock trades about -0.28 of its potential returns per unit of risk. The enGene Holdings Common is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  800.00  in enGene Holdings Common on April 4, 2024 and sell it today you would earn a total of  99.00  from holding enGene Holdings Common or generate 12.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Fractyl Health Common  vs.  enGene Holdings Common

Fractyl Health Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fractyl Health Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

enGene Holdings Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days enGene Holdings Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's technical and fundamental indicators remain very healthy which may send shares a bit higher in August 2024. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with Fractyl Health and EnGene Holdings

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

The idea behind Fractyl Health Common and enGene Holdings Common 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.