Correlation Between Structure Therapeutics and Arcellx

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

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

Diversification Opportunities for Structure Therapeutics and Arcellx

-0.25

Correlation Coefficient

Structure Therapeutics  Arcellx

Very good diversification

The 3 months correlation between Structure and Arcellx is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Structure Therapeutics America and Arcellx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcellx and Structure 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 Structure Therapeutics American are associated (or correlated) with Arcellx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcellx has no effect on the direction of Structure Therapeutics i.e., Structure Therapeutics and Arcellx go up and down completely randomly.

Pair Corralation between Structure Therapeutics and Arcellx

Given the investment horizon of 90 days Structure Therapeutics American is expected to generate 1.37 times more return on investment than Arcellx. However, Structure Therapeutics is 1.37 times more volatile than Arcellx. It trades about -0.08 of its potential returns per unit of risk. Arcellx is currently generating about -0.31 per unit of risk. If you would invest  3,870  in Structure Therapeutics American on September 12, 2024 and sell it today you would lose (400.50) from holding Structure Therapeutics American or give up 10.35% of portfolio value over 90 days.

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

Structure Therapeutics America  vs.  Arcellx

Structure Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Structure Therapeutics American has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Arcellx

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with Structure Therapeutics and Arcellx

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

The idea behind Structure Therapeutics American and Arcellx 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.