Correlation Between Achilles Therapeutics and Coherus BioSciences

Can any of the company-specific risk be diversified away by investing in both Achilles Therapeutics and Coherus 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 Coherus 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 Coherus BioSciences, you can compare the effects of market volatilities on Achilles Therapeutics and Coherus 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 Coherus BioSciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Achilles Therapeutics and Coherus BioSciences.

Diversification Opportunities for Achilles Therapeutics and Coherus BioSciences

-0.17

Correlation Coefficient

Achilles Therapeutics  Coherus BioSciences

Good diversification

The 3 months correlation between Achilles and Coherus is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Achilles Therapeutics PLC and Coherus BioSciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coherus 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 Coherus BioSciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coherus BioSciences has no effect on the direction of Achilles Therapeutics i.e., Achilles Therapeutics and Coherus BioSciences go up and down completely randomly.

Pair Corralation between Achilles Therapeutics and Coherus BioSciences

Given the investment horizon of 90 days Achilles Therapeutics PLC is expected to generate 0.6 times more return on investment than Coherus BioSciences. However, Achilles Therapeutics PLC is 1.68 times less risky than Coherus BioSciences. It trades about 0.03 of its potential returns per unit of risk. Coherus BioSciences is currently generating about -0.02 per unit of risk. If you would invest  110.00  in Achilles Therapeutics PLC on November 19, 2024 and sell it today you would earn a total of  28.00  from holding Achilles Therapeutics PLC or generate 25.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Achilles Therapeutics PLC  vs.  Coherus BioSciences

Achilles Therapeutics PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Achilles Therapeutics PLC are ranked lower than 10 (%) 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.

Coherus BioSciences

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Coherus BioSciences are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Coherus BioSciences unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Achilles Therapeutics and Coherus BioSciences

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

The idea behind Achilles Therapeutics PLC and Coherus 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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.