Correlation Between Achilles Therapeutics and Shattuck Labs

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

Diversification Opportunities for Achilles Therapeutics and Shattuck Labs

0.27

Correlation Coefficient

Achilles Therapeutics  Shattuck Labs

Modest diversification

The 3 months correlation between Achilles and Shattuck is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Achilles Therapeutics PLC and Shattuck Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shattuck Labs 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 Shattuck Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shattuck Labs has no effect on the direction of Achilles Therapeutics i.e., Achilles Therapeutics and Shattuck Labs go up and down completely randomly.

Pair Corralation between Achilles Therapeutics and Shattuck Labs

Given the investment horizon of 90 days Achilles Therapeutics PLC is expected to generate 0.43 times more return on investment than Shattuck Labs. However, Achilles Therapeutics PLC is 2.32 times less risky than Shattuck Labs. It trades about 0.15 of its potential returns per unit of risk. Shattuck Labs is currently generating about 0.01 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 Together
Strength	Very Weak
Accuracy	90.32%
Values	Daily Returns

Achilles Therapeutics PLC  vs.  Shattuck Labs

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.

Shattuck Labs

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shattuck Labs are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Shattuck Labs is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Achilles Therapeutics and Shattuck Labs

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

The idea behind Achilles Therapeutics PLC and Shattuck Labs 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.