Correlation Between PhaseBio Pharmaceuticals and Oncotelic Therapeutics

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

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

Diversification Opportunities for PhaseBio Pharmaceuticals and Oncotelic Therapeutics

0.0

Correlation Coefficient

PhaseBio Pharmaceuticals  Oncotelic Therapeutics

Pay attention - limited upside

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

Pair Corralation between PhaseBio Pharmaceuticals and Oncotelic Therapeutics

If you would invest (100.00) in Oncotelic Therapeutics on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Oncotelic Therapeutics or generate -100.0% return on investment over 90 days.

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

PhaseBio Pharmaceuticals  vs.  Oncotelic Therapeutics

PhaseBio Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days PhaseBio Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, PhaseBio Pharmaceuticals is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Oncotelic Therapeutics

Risk-Adjusted Performance

Very Weak

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

Pair Trading with PhaseBio Pharmaceuticals and Oncotelic Therapeutics

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

The idea behind PhaseBio Pharmaceuticals and Oncotelic 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.