Correlation Between Achilles Therapeutics and Alpha Tau

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

Diversification Opportunities for Achilles Therapeutics and Alpha Tau

-0.59

Correlation Coefficient

Achilles Therapeutics  Alpha Tau

Excellent diversification

The 3 months correlation between Achilles and Alpha is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Achilles Therapeutics PLC and Alpha Tau Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Tau Medical 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 Alpha Tau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Tau Medical has no effect on the direction of Achilles Therapeutics i.e., Achilles Therapeutics and Alpha Tau go up and down completely randomly.

Pair Corralation between Achilles Therapeutics and Alpha Tau

Given the investment horizon of 90 days Achilles Therapeutics PLC is expected to generate 0.75 times more return on investment than Alpha Tau. However, Achilles Therapeutics PLC is 1.33 times less risky than Alpha Tau. It trades about 0.15 of its potential returns per unit of risk. Alpha Tau Medical is currently generating about -0.06 per unit of risk. If you would invest  118.00  in Achilles Therapeutics PLC on December 29, 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	Very Weak
Accuracy	91.8%
Values	Daily Returns

Achilles Therapeutics PLC  vs.  Alpha Tau Medical

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.

Alpha Tau Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alpha Tau Medical 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 basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Achilles Therapeutics and Alpha Tau

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

The idea behind Achilles Therapeutics PLC and Alpha Tau Medical 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.