Correlation Between Monopar Therapeutics and Satsuma Pharmaceuticals

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

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

Diversification Opportunities for Monopar Therapeutics and Satsuma Pharmaceuticals

0.0

Correlation Coefficient

Monopar Therapeutics  Satsuma Pharmaceuticals

Pay attention - limited upside

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

Pair Corralation between Monopar Therapeutics and Satsuma Pharmaceuticals

If you would invest  2,201  in Monopar Therapeutics on December 1, 2024 and sell it today you would earn a total of  1,310  from holding Monopar Therapeutics or generate 59.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Monopar Therapeutics  vs.  Satsuma Pharmaceuticals

Monopar Therapeutics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Monopar Therapeutics are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Monopar Therapeutics reported solid returns over the last few months and may actually be approaching a breakup point.

Satsuma Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Satsuma Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Satsuma Pharmaceuticals is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Monopar Therapeutics and Satsuma Pharmaceuticals

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

The idea behind Monopar Therapeutics and Satsuma 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..