Correlation Between Estrella Immunopharma and Mink Therapeutics

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

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

Diversification Opportunities for Estrella Immunopharma and Mink Therapeutics

-0.21

Correlation Coefficient

Estrella Immunopharma  Mink Therapeutics

Very good diversification

The 3 months correlation between Estrella and Mink is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Estrella Immunopharma and Mink Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mink Therapeutics and Estrella Immunopharma 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 Estrella Immunopharma are associated (or correlated) with Mink Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mink Therapeutics has no effect on the direction of Estrella Immunopharma i.e., Estrella Immunopharma and Mink Therapeutics go up and down completely randomly.

Pair Corralation between Estrella Immunopharma and Mink Therapeutics

Assuming the 90 days horizon Estrella Immunopharma is expected to generate 1.51 times less return on investment than Mink Therapeutics. In addition to that, Estrella Immunopharma is 1.28 times more volatile than Mink Therapeutics. It trades about 0.05 of its total potential returns per unit of risk. Mink Therapeutics is currently generating about 0.1 per unit of volatility. If you would invest  630.00  in Mink Therapeutics on December 29, 2024 and sell it today you would earn a total of  273.00  from holding Mink Therapeutics or generate 43.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	57.38%
Values	Daily Returns

Estrella Immunopharma  vs.  Mink Therapeutics

Estrella Immunopharma

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Estrella Immunopharma are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Estrella Immunopharma showed solid returns over the last few months and may actually be approaching a breakup point.

Mink Therapeutics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mink Therapeutics are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady forward-looking signals, Mink Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Estrella Immunopharma and Mink Therapeutics

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

The idea behind Estrella Immunopharma and Mink 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.