Correlation Between Akero Therapeutics and Puma Biotechnology
Can any of the company-specific risk be diversified away by investing in both Akero Therapeutics and Puma Biotechnology 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 Akero Therapeutics and Puma Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akero Therapeutics and Puma Biotechnology, you can compare the effects of market volatilities on Akero Therapeutics and Puma Biotechnology 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 Akero Therapeutics with a short position of Puma Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akero Therapeutics and Puma Biotechnology.
Diversification Opportunities for Akero Therapeutics and Puma Biotechnology
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Akero and Puma is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Akero Therapeutics and Puma Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puma Biotechnology and Akero 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 Akero Therapeutics are associated (or correlated) with Puma Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puma Biotechnology has no effect on the direction of Akero Therapeutics i.e., Akero Therapeutics and Puma Biotechnology go up and down completely randomly.
Pair Corralation between Akero Therapeutics and Puma Biotechnology
Given the investment horizon of 90 days Akero Therapeutics is expected to generate 2.0 times more return on investment than Puma Biotechnology. However, Akero Therapeutics is 2.0 times more volatile than Puma Biotechnology. It trades about 0.08 of its potential returns per unit of risk. Puma Biotechnology is currently generating about 0.1 per unit of risk. If you would invest 2,641 in Akero Therapeutics on December 5, 2024 and sell it today you would earn a total of 1,872 from holding Akero Therapeutics or generate 70.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Akero Therapeutics vs. Puma Biotechnology
Performance |
Timeline |
Akero Therapeutics |
Puma Biotechnology |
Akero Therapeutics and Puma Biotechnology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Akero Therapeutics and Puma Biotechnology
The main advantage of trading using opposite Akero Therapeutics and Puma Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akero Therapeutics position performs unexpectedly, Puma Biotechnology 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 Puma Biotechnology will offset losses from the drop in Puma Biotechnology's long position.Akero Therapeutics vs. Terns Pharmaceuticals | Akero Therapeutics vs. Madrigal Pharmaceuticals | Akero Therapeutics vs. Inozyme Pharma | Akero Therapeutics vs. Viking Therapeutics |
Puma Biotechnology vs. Ultragenyx | Puma Biotechnology vs. Crinetics Pharmaceuticals | Puma Biotechnology vs. Arvinas | Puma Biotechnology vs. Revolution Medicines |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |