Correlation Between Armata Pharmaceuticals and Graphite Bio

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

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

Diversification Opportunities for Armata Pharmaceuticals and Graphite Bio

0.0

Correlation Coefficient

Armata Pharmaceuticals  Graphite Bio

Pay attention - limited upside

The 3 months correlation between Armata and Graphite is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Armata Pharmaceuticals and Graphite Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphite Bio 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 Graphite Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphite Bio has no effect on the direction of Armata Pharmaceuticals i.e., Armata Pharmaceuticals and Graphite Bio go up and down completely randomly.

Pair Corralation between Armata Pharmaceuticals and Graphite Bio

If you would invest (100.00) in Graphite Bio on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Graphite Bio or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Armata Pharmaceuticals  vs.  Graphite Bio

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 abnormal performance in the last few months, the Stock's primary indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Graphite Bio

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Armata Pharmaceuticals and Graphite Bio

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

The idea behind Armata Pharmaceuticals and Graphite Bio 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.