Correlation Between Janux Therapeutics and Seres Therapeutics

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

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

Diversification Opportunities for Janux Therapeutics and Seres Therapeutics

-0.36

Correlation Coefficient

Janux Therapeutics  Seres Therapeutics

Very good diversification

The 3 months correlation between Janux and Seres is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Janux Therapeutics and Seres Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seres Therapeutics 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 Seres Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seres Therapeutics has no effect on the direction of Janux Therapeutics i.e., Janux Therapeutics and Seres Therapeutics go up and down completely randomly.

Pair Corralation between Janux Therapeutics and Seres Therapeutics

Given the investment horizon of 90 days Janux Therapeutics is expected to generate 10.13 times less return on investment than Seres Therapeutics. But when comparing it to its historical volatility, Janux Therapeutics is 2.09 times less risky than Seres Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Seres Therapeutics is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  78.00  in Seres Therapeutics on September 3, 2024 and sell it today you would earn a total of  20.00  from holding Seres Therapeutics or generate 25.64% return on investment over 90 days.

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

Janux Therapeutics  vs.  Seres Therapeutics

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.

Seres Therapeutics

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Seres Therapeutics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Seres Therapeutics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Janux Therapeutics and Seres Therapeutics

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

The idea behind Janux Therapeutics and Seres 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 Commodity Directory module to find actively traded commodities issued by global exchanges.