Correlation Between Ikena Oncology and Cerevel Therapeutics

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

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

Diversification Opportunities for Ikena Oncology and Cerevel Therapeutics

0.0

Correlation Coefficient

Ikena Oncology  Cerevel Therapeutics

Pay attention - limited upside

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

Pair Corralation between Ikena Oncology and Cerevel Therapeutics

If you would invest (100.00) in Cerevel Therapeutics Holdings on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Cerevel Therapeutics Holdings 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

Ikena Oncology  vs.  Cerevel Therapeutics Holdings

Ikena Oncology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ikena Oncology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Cerevel Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cerevel Therapeutics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Cerevel Therapeutics is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ikena Oncology and Cerevel Therapeutics

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

The idea behind Ikena Oncology and Cerevel Therapeutics Holdings 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..