Correlation Between Janux Therapeutics and Erytech Pharma

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

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

Diversification Opportunities for Janux Therapeutics and Erytech Pharma

0.21

Correlation Coefficient

Janux Therapeutics  Erytech Pharma

Modest diversification

The 3 months correlation between Janux and Erytech is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Janux Therapeutics and Erytech Pharma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erytech Pharma SA and Janux 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 Janux Therapeutics are associated (or correlated) with Erytech Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erytech Pharma SA has no effect on the direction of Janux Therapeutics i.e., Janux Therapeutics and Erytech Pharma go up and down completely randomly.

Pair Corralation between Janux Therapeutics and Erytech Pharma

If you would invest  4,501  in Janux Therapeutics on September 2, 2024 and sell it today you would earn a total of  20.00  from holding Janux Therapeutics or generate 0.44% return on investment over 90 days.

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

Janux Therapeutics  vs.  Erytech Pharma SA

Janux Therapeutics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Janux Therapeutics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Janux Therapeutics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Erytech Pharma SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Erytech Pharma SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Erytech Pharma is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Janux Therapeutics and Erytech Pharma

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

The idea behind Janux Therapeutics and Erytech Pharma SA 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.