Correlation Between Aadi Bioscience and Graphite Bio

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

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

Diversification Opportunities for Aadi Bioscience and Graphite Bio

0.0

Correlation Coefficient

Aadi Bioscience  Graphite Bio

Pay attention - limited upside

The 3 months correlation between Aadi and Graphite is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aadi Bioscience and Graphite Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphite Bio and Aadi Bioscience 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 Aadi Bioscience are associated (or correlated) with Graphite Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphite Bio has no effect on the direction of Aadi Bioscience i.e., Aadi Bioscience and Graphite Bio go up and down completely randomly.

Pair Corralation between Aadi Bioscience and Graphite Bio

If you would invest (100.00) in Graphite Bio on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Graphite Bio or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Aadi Bioscience  vs.  Graphite Bio

Aadi Bioscience

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aadi Bioscience has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Graphite Bio

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Aadi Bioscience and Graphite Bio

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

The idea behind Aadi Bioscience and Graphite Bio 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.