Correlation Between Atara Biotherapeutics and Pieris Pharmaceuticals

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

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

Diversification Opportunities for Atara Biotherapeutics and Pieris Pharmaceuticals

-0.16

Correlation Coefficient

Atara Biotherapeutics  Pieris Pharmaceuticals

Good diversification

The 3 months correlation between Atara and Pieris is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Atara Biotherapeutics and Pieris Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pieris Pharmaceuticals and Atara Biotherapeutics 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 Atara Biotherapeutics are associated (or correlated) with Pieris Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pieris Pharmaceuticals has no effect on the direction of Atara Biotherapeutics i.e., Atara Biotherapeutics and Pieris Pharmaceuticals go up and down completely randomly.

Pair Corralation between Atara Biotherapeutics and Pieris Pharmaceuticals

Given the investment horizon of 90 days Atara Biotherapeutics is expected to generate 2.16 times more return on investment than Pieris Pharmaceuticals. However, Atara Biotherapeutics is 2.16 times more volatile than Pieris Pharmaceuticals. It trades about 0.1 of its potential returns per unit of risk. Pieris Pharmaceuticals is currently generating about -0.08 per unit of risk. If you would invest  787.00  in Atara Biotherapeutics on September 18, 2024 and sell it today you would earn a total of  264.00  from holding Atara Biotherapeutics or generate 33.55% return on investment over 90 days.

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

Atara Biotherapeutics  vs.  Pieris Pharmaceuticals

Atara Biotherapeutics

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Atara Biotherapeutics are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Atara Biotherapeutics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pieris Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pieris Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Atara Biotherapeutics and Pieris Pharmaceuticals

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

The idea behind Atara Biotherapeutics and Pieris Pharmaceuticals 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.