Correlation Between Structure Therapeutics and Karuna Therapeutics

Can any of the company-specific risk be diversified away by investing in both Structure Therapeutics and Karuna 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 Structure Therapeutics and Karuna Therapeutics 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 Karuna Therapeutics, you can compare the effects of market volatilities on Structure Therapeutics and Karuna 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 Structure Therapeutics with a short position of Karuna Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Structure Therapeutics and Karuna Therapeutics.

Diversification Opportunities for Structure Therapeutics and Karuna Therapeutics

0.27

Correlation Coefficient

Structure Therapeutics  Karuna Therapeutics

Modest diversification

The 3 months correlation between Structure and Karuna is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Structure Therapeutics America and Karuna Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karuna Therapeutics 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 Karuna Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karuna Therapeutics has no effect on the direction of Structure Therapeutics i.e., Structure Therapeutics and Karuna Therapeutics go up and down completely randomly.

Pair Corralation between Structure Therapeutics and Karuna Therapeutics

If you would invest  20,311  in Karuna Therapeutics on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Karuna Therapeutics or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Structure Therapeutics America  vs.  Karuna Therapeutics

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.

Karuna Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Karuna Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Karuna Therapeutics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Structure Therapeutics and Karuna Therapeutics

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

The idea behind Structure Therapeutics American and Karuna 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.