Correlation Between AnaptysBio and Stoke Therapeutics
Can any of the company-specific risk be diversified away by investing in both AnaptysBio and Stoke Therapeutics 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 AnaptysBio and Stoke Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AnaptysBio and Stoke Therapeutics, you can compare the effects of market volatilities on AnaptysBio and Stoke Therapeutics 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 AnaptysBio with a short position of Stoke Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of AnaptysBio and Stoke Therapeutics.
Diversification Opportunities for AnaptysBio and Stoke Therapeutics
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AnaptysBio and Stoke is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding AnaptysBio and Stoke Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stoke Therapeutics and AnaptysBio 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 AnaptysBio are associated (or correlated) with Stoke Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stoke Therapeutics has no effect on the direction of AnaptysBio i.e., AnaptysBio and Stoke Therapeutics go up and down completely randomly.
Pair Corralation between AnaptysBio and Stoke Therapeutics
Given the investment horizon of 90 days AnaptysBio is expected to under-perform the Stoke Therapeutics. In addition to that, AnaptysBio is 1.8 times more volatile than Stoke Therapeutics. It trades about -0.17 of its total potential returns per unit of risk. Stoke Therapeutics is currently generating about -0.06 per unit of volatility. If you would invest 1,472 in Stoke Therapeutics on September 14, 2024 and sell it today you would lose (240.00) from holding Stoke Therapeutics or give up 16.3% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AnaptysBio vs. Stoke Therapeutics
Performance |
Timeline |
AnaptysBio |
Stoke Therapeutics |
AnaptysBio and Stoke Therapeutics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AnaptysBio and Stoke Therapeutics
The main advantage of trading using opposite AnaptysBio and Stoke Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AnaptysBio position performs unexpectedly, Stoke Therapeutics 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 Stoke Therapeutics will offset losses from the drop in Stoke Therapeutics' long position.AnaptysBio vs. Crinetics Pharmaceuticals | AnaptysBio vs. Rhythm Pharmaceuticals | AnaptysBio vs. Kura Oncology | AnaptysBio vs. CytomX Therapeutics |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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