Correlation Between Armata Pharmaceuticals and BeyondSpring

Can any of the company-specific risk be diversified away by investing in both Armata Pharmaceuticals and BeyondSpring 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 Armata Pharmaceuticals and BeyondSpring into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Armata Pharmaceuticals and BeyondSpring, you can compare the effects of market volatilities on Armata Pharmaceuticals and BeyondSpring 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 Armata Pharmaceuticals with a short position of BeyondSpring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armata Pharmaceuticals and BeyondSpring.

Diversification Opportunities for Armata Pharmaceuticals and BeyondSpring

0.61

Correlation Coefficient

Armata Pharmaceuticals  BeyondSpring

Poor diversification

The 3 months correlation between Armata and BeyondSpring is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Armata Pharmaceuticals and BeyondSpring in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BeyondSpring and Armata Pharmaceuticals 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 Armata Pharmaceuticals are associated (or correlated) with BeyondSpring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BeyondSpring has no effect on the direction of Armata Pharmaceuticals i.e., Armata Pharmaceuticals and BeyondSpring go up and down completely randomly.

Pair Corralation between Armata Pharmaceuticals and BeyondSpring

Given the investment horizon of 90 days Armata Pharmaceuticals is expected to under-perform the BeyondSpring. In addition to that, Armata Pharmaceuticals is 1.19 times more volatile than BeyondSpring. It trades about -0.05 of its total potential returns per unit of risk. BeyondSpring is currently generating about -0.03 per unit of volatility. If you would invest  162.00  in BeyondSpring on December 28, 2024 and sell it today you would lose (13.00) from holding BeyondSpring or give up 8.02% of portfolio value over 90 days.

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

Armata Pharmaceuticals  vs.  BeyondSpring

Armata Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Armata Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest abnormal performance, the Stock's primary indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

BeyondSpring

Risk-Adjusted Performance

Very Weak

Over the last 90 days BeyondSpring has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, BeyondSpring is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Armata Pharmaceuticals and BeyondSpring

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

The idea behind Armata Pharmaceuticals and BeyondSpring 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .