Correlation Between Frequency Therapeutics and Armata Pharmaceuticals

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

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

Diversification Opportunities for Frequency Therapeutics and Armata Pharmaceuticals

0.0

Correlation Coefficient

Frequency Therapeutics  Armata Pharmaceuticals

Pay attention - limited upside

The 3 months correlation between Frequency and Armata is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Frequency Therapeutics and Armata Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armata Pharmaceuticals and Frequency 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 Frequency Therapeutics are associated (or correlated) with Armata Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armata Pharmaceuticals has no effect on the direction of Frequency Therapeutics i.e., Frequency Therapeutics and Armata Pharmaceuticals go up and down completely randomly.

Pair Corralation between Frequency Therapeutics and Armata Pharmaceuticals

If you would invest (100.00) in Frequency Therapeutics on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Frequency Therapeutics or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Frequency Therapeutics  vs.  Armata Pharmaceuticals

Frequency Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Frequency Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Frequency Therapeutics is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Armata Pharmaceuticals

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Frequency Therapeutics and Armata Pharmaceuticals

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

The idea behind Frequency Therapeutics and Armata Pharmaceuticals 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.