Correlation Between Poniard Pharmaceuticals and Ikena Oncology

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

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

Diversification Opportunities for Poniard Pharmaceuticals and Ikena Oncology

0.0

Correlation Coefficient

Poniard Pharmaceuticals  Ikena Oncology

Pay attention - limited upside

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

Pair Corralation between Poniard Pharmaceuticals and Ikena Oncology

If you would invest  1.00  in Poniard Pharmaceuticals on September 14, 2024 and sell it today you would earn a total of  0.00  from holding Poniard Pharmaceuticals or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Poniard Pharmaceuticals  vs.  Ikena Oncology

Poniard Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ikena Oncology

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Poniard Pharmaceuticals and Ikena Oncology

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

The idea behind Poniard Pharmaceuticals and Ikena Oncology 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.