Correlation Between Design Therapeutics and Biomx

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

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

Diversification Opportunities for Design Therapeutics and Biomx

-0.26

Correlation Coefficient

Design Therapeutics  Biomx

Very good diversification

The 3 months correlation between Design and Biomx is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Design Therapeutics and Biomx Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomx Inc and Design Therapeutics 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 Design Therapeutics are associated (or correlated) with Biomx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomx Inc has no effect on the direction of Design Therapeutics i.e., Design Therapeutics and Biomx go up and down completely randomly.

Pair Corralation between Design Therapeutics and Biomx

Given the investment horizon of 90 days Design Therapeutics is expected to under-perform the Biomx. But the stock apears to be less risky and, when comparing its historical volatility, Design Therapeutics is 1.01 times less risky than Biomx. The stock trades about -0.08 of its potential returns per unit of risk. The Biomx Inc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  70.00  in Biomx Inc on December 28, 2024 and sell it today you would lose (14.00) from holding Biomx Inc or give up 20.0% of portfolio value over 90 days.

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

Design Therapeutics  vs.  Biomx Inc

Design Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Design Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Biomx Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Biomx Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Design Therapeutics and Biomx

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

The idea behind Design Therapeutics and Biomx Inc 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.