Correlation Between Erytech Pharma and Magenta Therapeutics
Can any of the company-specific risk be diversified away by investing in both Erytech Pharma and Magenta 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 Erytech Pharma and Magenta Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erytech Pharma SA and Magenta Therapeutics, you can compare the effects of market volatilities on Erytech Pharma and Magenta 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 Erytech Pharma with a short position of Magenta Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erytech Pharma and Magenta Therapeutics.
Diversification Opportunities for Erytech Pharma and Magenta Therapeutics
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Erytech and Magenta is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Erytech Pharma SA and Magenta Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magenta Therapeutics and Erytech Pharma 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 Erytech Pharma SA are associated (or correlated) with Magenta Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magenta Therapeutics has no effect on the direction of Erytech Pharma i.e., Erytech Pharma and Magenta Therapeutics go up and down completely randomly.
Pair Corralation between Erytech Pharma and Magenta Therapeutics
If you would invest 82.00 in Magenta Therapeutics on September 24, 2024 and sell it today you would earn a total of 0.00 from holding Magenta Therapeutics or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Erytech Pharma SA vs. Magenta Therapeutics
Performance |
Timeline |
Erytech Pharma SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Magenta Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Erytech Pharma and Magenta Therapeutics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Erytech Pharma and Magenta Therapeutics
The main advantage of trading using opposite Erytech Pharma and Magenta Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erytech Pharma position performs unexpectedly, Magenta 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 Magenta Therapeutics will offset losses from the drop in Magenta Therapeutics' long position.Erytech Pharma vs. Genfit | Erytech Pharma vs. HCW Biologics | Erytech Pharma vs. Aptorum Group Ltd | Erytech Pharma vs. Surrozen |
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Check out your portfolio center.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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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