Correlation Between Crinetics Pharmaceuticals and Oxford Nanopore

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

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

Diversification Opportunities for Crinetics Pharmaceuticals and Oxford Nanopore

0.08

Correlation Coefficient

Crinetics Pharmaceuticals  Oxford Nanopore

Significant diversification

The 3 months correlation between Crinetics and Oxford is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Crinetics Pharmaceuticals and Oxford Nanopore Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Nanopore Tech and Crinetics 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 Crinetics Pharmaceuticals are associated (or correlated) with Oxford Nanopore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Nanopore Tech has no effect on the direction of Crinetics Pharmaceuticals i.e., Crinetics Pharmaceuticals and Oxford Nanopore go up and down completely randomly.

Pair Corralation between Crinetics Pharmaceuticals and Oxford Nanopore

Given the investment horizon of 90 days Crinetics Pharmaceuticals is expected to generate 0.58 times more return on investment than Oxford Nanopore. However, Crinetics Pharmaceuticals is 1.74 times less risky than Oxford Nanopore. It trades about -0.15 of its potential returns per unit of risk. Oxford Nanopore Technologies is currently generating about -0.09 per unit of risk. If you would invest  5,887  in Crinetics Pharmaceuticals on October 7, 2024 and sell it today you would lose (572.00) from holding Crinetics Pharmaceuticals or give up 9.72% of portfolio value over 90 days.

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

Crinetics Pharmaceuticals  vs.  Oxford Nanopore Technologies

Crinetics Pharmaceuticals

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Crinetics Pharmaceuticals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Crinetics Pharmaceuticals is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Oxford Nanopore Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oxford Nanopore Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Crinetics Pharmaceuticals and Oxford Nanopore

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

The idea behind Crinetics Pharmaceuticals and Oxford Nanopore Technologies 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.