Correlation Between Achilles Therapeutics and Assembly Biosciences

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

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

Diversification Opportunities for Achilles Therapeutics and Assembly Biosciences

-0.84

Correlation Coefficient

Achilles Therapeutics  Assembly Biosciences

Pay attention - limited upside

The 3 months correlation between Achilles and Assembly is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Achilles Therapeutics PLC and Assembly Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assembly Biosciences and Achilles Therapeutics 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 Achilles Therapeutics PLC are associated (or correlated) with Assembly Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assembly Biosciences has no effect on the direction of Achilles Therapeutics i.e., Achilles Therapeutics and Assembly Biosciences go up and down completely randomly.

Pair Corralation between Achilles Therapeutics and Assembly Biosciences

Given the investment horizon of 90 days Achilles Therapeutics PLC is expected to generate 0.92 times more return on investment than Assembly Biosciences. However, Achilles Therapeutics PLC is 1.09 times less risky than Assembly Biosciences. It trades about 0.15 of its potential returns per unit of risk. Assembly Biosciences is currently generating about -0.18 per unit of risk. If you would invest  118.00  in Achilles Therapeutics PLC on December 30, 2024 and sell it today you would earn a total of  30.00  from holding Achilles Therapeutics PLC or generate 25.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	90.32%
Values	Daily Returns

Achilles Therapeutics PLC  vs.  Assembly Biosciences

Achilles Therapeutics PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Achilles Therapeutics PLC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical indicators, Achilles Therapeutics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Assembly Biosciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Assembly Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Achilles Therapeutics and Assembly Biosciences

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

The idea behind Achilles Therapeutics PLC and Assembly Biosciences 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.

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 the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.