Correlation Between Seres Therapeutics and Ampio Pharm

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

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

Diversification Opportunities for Seres Therapeutics and Ampio Pharm

-0.37

Correlation Coefficient

Seres Therapeutics  Ampio Pharm

Very good diversification

The 3 months correlation between Seres and Ampio is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Seres Therapeutics and Ampio Pharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampio Pharm and Seres 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 Seres Therapeutics are associated (or correlated) with Ampio Pharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampio Pharm has no effect on the direction of Seres Therapeutics i.e., Seres Therapeutics and Ampio Pharm go up and down completely randomly.

Pair Corralation between Seres Therapeutics and Ampio Pharm

If you would invest  24.00  in Ampio Pharm on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Ampio Pharm or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Seres Therapeutics  vs.  Ampio Pharm

Seres Therapeutics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Seres Therapeutics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Seres Therapeutics may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Ampio Pharm

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Seres Therapeutics and Ampio Pharm

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

The idea behind Seres Therapeutics and Ampio Pharm 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.