Correlation Between Getty Copper and Dianthus Therapeutics

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

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

Diversification Opportunities for Getty Copper and Dianthus Therapeutics

0.0

Correlation Coefficient

Getty Copper  Dianthus Therapeutics

Pay attention - limited upside

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

Pair Corralation between Getty Copper and Dianthus Therapeutics

Assuming the 90 days horizon Getty Copper is expected to generate 1.73 times more return on investment than Dianthus Therapeutics. However, Getty Copper is 1.73 times more volatile than Dianthus Therapeutics. It trades about 0.09 of its potential returns per unit of risk. Dianthus Therapeutics is currently generating about 0.1 per unit of risk. If you would invest  1.11  in Getty Copper on October 5, 2024 and sell it today you would earn a total of  3.77  from holding Getty Copper or generate 339.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.63%
Values	Daily Returns

Getty Copper  vs.  Dianthus Therapeutics

Getty Copper

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Getty Copper has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Getty Copper is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Dianthus Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dianthus Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Getty Copper and Dianthus Therapeutics

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

The idea behind Getty Copper and Dianthus 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.