Correlation Between Equillium and Amicus Therapeutics

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

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

Diversification Opportunities for Equillium and Amicus Therapeutics

0.75

Correlation Coefficient

Equillium  Amicus Therapeutics

Poor diversification

The 3 months correlation between Equillium and Amicus is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Equillium and Amicus Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amicus Therapeutics and Equillium 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 Equillium are associated (or correlated) with Amicus Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amicus Therapeutics has no effect on the direction of Equillium i.e., Equillium and Amicus Therapeutics go up and down completely randomly.

Pair Corralation between Equillium and Amicus Therapeutics

Allowing for the 90-day total investment horizon Equillium is expected to under-perform the Amicus Therapeutics. In addition to that, Equillium is 3.45 times more volatile than Amicus Therapeutics. It trades about -0.08 of its total potential returns per unit of risk. Amicus Therapeutics is currently generating about -0.17 per unit of volatility. If you would invest  1,187  in Amicus Therapeutics on October 22, 2024 and sell it today you would lose (246.00) from holding Amicus Therapeutics or give up 20.72% of portfolio value over 90 days.

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

Equillium  vs.  Amicus Therapeutics

Equillium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Equillium has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Amicus Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amicus Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Equillium and Amicus Therapeutics

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

The idea behind Equillium and Amicus Therapeutics 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.