Correlation Between Centessa Pharmaceuticals and Amer Sports,

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

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

Diversification Opportunities for Centessa Pharmaceuticals and Amer Sports,

0.64

Correlation Coefficient

Centessa Pharmaceuticals  Amer Sports,

Poor diversification

The 3 months correlation between Centessa and Amer is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Centessa Pharmaceuticals PLC and Amer Sports, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Sports, and Centessa 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 Centessa Pharmaceuticals PLC are associated (or correlated) with Amer Sports,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Sports, has no effect on the direction of Centessa Pharmaceuticals i.e., Centessa Pharmaceuticals and Amer Sports, go up and down completely randomly.

Pair Corralation between Centessa Pharmaceuticals and Amer Sports,

Given the investment horizon of 90 days Centessa Pharmaceuticals is expected to generate 2.46 times less return on investment than Amer Sports,. In addition to that, Centessa Pharmaceuticals is 1.81 times more volatile than Amer Sports,. It trades about 0.05 of its total potential returns per unit of risk. Amer Sports, is currently generating about 0.2 per unit of volatility. If you would invest  2,573  in Amer Sports, on October 4, 2024 and sell it today you would earn a total of  223.00  from holding Amer Sports, or generate 8.67% return on investment over 90 days.

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

Centessa Pharmaceuticals PLC  vs.  Amer Sports,

Centessa Pharmaceuticals

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Centessa Pharmaceuticals PLC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Centessa Pharmaceuticals sustained solid returns over the last few months and may actually be approaching a breakup point.

Amer Sports,

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amer Sports, are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Amer Sports, unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Centessa Pharmaceuticals and Amer Sports,

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

The idea behind Centessa Pharmaceuticals PLC and Amer Sports, 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.