Correlation Between Puma Biotechnology and Absci Corp

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

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

Diversification Opportunities for Puma Biotechnology and Absci Corp

-0.35

Correlation Coefficient

Puma Biotechnology  Absci Corp

Very good diversification

The 3 months correlation between Puma and Absci is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Puma Biotechnology and Absci Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absci Corp and Puma Biotechnology 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 Puma Biotechnology are associated (or correlated) with Absci Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absci Corp has no effect on the direction of Puma Biotechnology i.e., Puma Biotechnology and Absci Corp go up and down completely randomly.

Pair Corralation between Puma Biotechnology and Absci Corp

Given the investment horizon of 90 days Puma Biotechnology is expected to generate 0.74 times more return on investment than Absci Corp. However, Puma Biotechnology is 1.35 times less risky than Absci Corp. It trades about 0.07 of its potential returns per unit of risk. Absci Corp is currently generating about 0.02 per unit of risk. If you would invest  252.00  in Puma Biotechnology on September 15, 2024 and sell it today you would earn a total of  36.00  from holding Puma Biotechnology or generate 14.29% return on investment over 90 days.

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

Puma Biotechnology  vs.  Absci Corp

Puma Biotechnology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Puma Biotechnology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Puma Biotechnology demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Absci Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Absci Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Absci Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Puma Biotechnology and Absci Corp

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

The idea behind Puma Biotechnology and Absci Corp 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.