Correlation Between Bolt Biotherapeutics and Crinetics Pharmaceuticals

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

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

Diversification Opportunities for Bolt Biotherapeutics and Crinetics Pharmaceuticals

0.13

Correlation Coefficient

Bolt Biotherapeutics  Crinetics Pharmaceuticals

Average diversification

The 3 months correlation between Bolt and Crinetics is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bolt Biotherapeutics and Crinetics Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crinetics Pharmaceuticals and Bolt 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 Bolt Biotherapeutics are associated (or correlated) with Crinetics Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crinetics Pharmaceuticals has no effect on the direction of Bolt Biotherapeutics i.e., Bolt Biotherapeutics and Crinetics Pharmaceuticals go up and down completely randomly.

Pair Corralation between Bolt Biotherapeutics and Crinetics Pharmaceuticals

Given the investment horizon of 90 days Bolt Biotherapeutics is expected to under-perform the Crinetics Pharmaceuticals. In addition to that, Bolt Biotherapeutics is 1.08 times more volatile than Crinetics Pharmaceuticals. It trades about -0.01 of its total potential returns per unit of risk. Crinetics Pharmaceuticals is currently generating about 0.08 per unit of volatility. If you would invest  5,098  in Crinetics Pharmaceuticals on September 5, 2024 and sell it today you would earn a total of  561.00  from holding Crinetics Pharmaceuticals or generate 11.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Bolt Biotherapeutics  vs.  Crinetics Pharmaceuticals

Bolt Biotherapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bolt Biotherapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Bolt Biotherapeutics is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Crinetics Pharmaceuticals

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Crinetics Pharmaceuticals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Crinetics Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Bolt Biotherapeutics and Crinetics Pharmaceuticals

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

The idea behind Bolt Biotherapeutics and Crinetics 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.