Correlation Between Gain Therapeutics and Instil Bio

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

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

Diversification Opportunities for Gain Therapeutics and Instil Bio

0.28

Correlation Coefficient

Gain Therapeutics  Instil Bio

Modest diversification

The 3 months correlation between Gain and Instil is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Gain Therapeutics and Instil Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instil Bio and Gain 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 Gain Therapeutics are associated (or correlated) with Instil Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instil Bio has no effect on the direction of Gain Therapeutics i.e., Gain Therapeutics and Instil Bio go up and down completely randomly.

Pair Corralation between Gain Therapeutics and Instil Bio

Given the investment horizon of 90 days Gain Therapeutics is expected to generate 0.84 times more return on investment than Instil Bio. However, Gain Therapeutics is 1.19 times less risky than Instil Bio. It trades about 0.12 of its potential returns per unit of risk. Instil Bio is currently generating about 0.0 per unit of risk. If you would invest  160.00  in Gain Therapeutics on December 26, 2024 and sell it today you would earn a total of  68.00  from holding Gain Therapeutics or generate 42.5% return on investment over 90 days.

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

Gain Therapeutics  vs.  Instil Bio

Gain Therapeutics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gain Therapeutics are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Gain Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Instil Bio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Instil Bio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Instil Bio is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Gain Therapeutics and Instil Bio

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

The idea behind Gain Therapeutics and Instil Bio 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.