Correlation Between Mink Therapeutics and Rigel Pharmaceuticals

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

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

Diversification Opportunities for Mink Therapeutics and Rigel Pharmaceuticals

0.14

Correlation Coefficient

Mink Therapeutics  Rigel Pharmaceuticals

Average diversification

The 3 months correlation between Mink and Rigel is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mink Therapeutics and Rigel Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rigel Pharmaceuticals and Mink 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 Mink Therapeutics are associated (or correlated) with Rigel Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rigel Pharmaceuticals has no effect on the direction of Mink Therapeutics i.e., Mink Therapeutics and Rigel Pharmaceuticals go up and down completely randomly.

Pair Corralation between Mink Therapeutics and Rigel Pharmaceuticals

Given the investment horizon of 90 days Mink Therapeutics is expected to generate 2.75 times more return on investment than Rigel Pharmaceuticals. However, Mink Therapeutics is 2.75 times more volatile than Rigel Pharmaceuticals. It trades about 0.08 of its potential returns per unit of risk. Rigel Pharmaceuticals is currently generating about -0.03 per unit of risk. If you would invest  732.00  in Mink Therapeutics on December 2, 2024 and sell it today you would earn a total of  163.00  from holding Mink Therapeutics or generate 22.27% return on investment over 90 days.

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

Mink Therapeutics  vs.  Rigel Pharmaceuticals

Mink Therapeutics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mink Therapeutics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady forward-looking signals, Mink Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Rigel Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rigel Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Mink Therapeutics and Rigel Pharmaceuticals

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

The idea behind Mink Therapeutics and Rigel Pharmaceuticals 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.