Correlation Between Black Diamond and Y MAbs

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

By analyzing existing cross correlation between Black Diamond Therapeutics and Y mAbs Therapeutics, you can compare the effects of market volatilities on Black Diamond and Y MAbs 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 Black Diamond with a short position of Y MAbs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Diamond and Y MAbs.

Diversification Opportunities for Black Diamond and Y MAbs

0.39

Correlation Coefficient

Black Diamond  Y MAbs

Weak diversification

The 3 months correlation between Black and YMAB is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Black Diamond Therapeutics and Y mAbs Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Y mAbs Therapeutics and Black Diamond 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 Black Diamond Therapeutics are associated (or correlated) with Y MAbs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Y mAbs Therapeutics has no effect on the direction of Black Diamond i.e., Black Diamond and Y MAbs go up and down completely randomly.

Pair Corralation between Black Diamond and Y MAbs

Given the investment horizon of 90 days Black Diamond Therapeutics is expected to under-perform the Y MAbs. In addition to that, Black Diamond is 1.03 times more volatile than Y mAbs Therapeutics. It trades about -0.28 of its total potential returns per unit of risk. Y mAbs Therapeutics is currently generating about -0.1 per unit of volatility. If you would invest  1,301  in Y mAbs Therapeutics on September 14, 2024 and sell it today you would lose (324.00) from holding Y mAbs Therapeutics or give up 24.9% of portfolio value over 90 days.

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

Black Diamond Therapeutics  vs.  Y mAbs Therapeutics

Black Diamond Therap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Black Diamond Therapeutics 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 fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Y mAbs Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Y mAbs Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Black Diamond and Y MAbs

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

The idea behind Black Diamond Therapeutics and Y mAbs Therapeutics 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.