Correlation Between Bolt Biotherapeutics and Ideaya Biosciences

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

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

Diversification Opportunities for Bolt Biotherapeutics and Ideaya Biosciences

0.37

Correlation Coefficient

Bolt Biotherapeutics  Ideaya Biosciences

Weak diversification

The 3 months correlation between Bolt and Ideaya is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bolt Biotherapeutics and Ideaya Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ideaya Biosciences 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 Ideaya Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ideaya Biosciences has no effect on the direction of Bolt Biotherapeutics i.e., Bolt Biotherapeutics and Ideaya Biosciences go up and down completely randomly.

Pair Corralation between Bolt Biotherapeutics and Ideaya Biosciences

Given the investment horizon of 90 days Bolt Biotherapeutics is expected to generate 0.88 times more return on investment than Ideaya Biosciences. However, Bolt Biotherapeutics is 1.14 times less risky than Ideaya Biosciences. It trades about -0.05 of its potential returns per unit of risk. Ideaya Biosciences is currently generating about -0.12 per unit of risk. If you would invest  62.00  in Bolt Biotherapeutics on September 12, 2024 and sell it today you would lose (6.35) from holding Bolt Biotherapeutics or give up 10.24% of portfolio value over 90 days.

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

Bolt Biotherapeutics  vs.  Ideaya Biosciences

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 latest weak performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Ideaya Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ideaya Biosciences 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 Bolt Biotherapeutics and Ideaya Biosciences

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

The idea behind Bolt Biotherapeutics and Ideaya Biosciences 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.