Correlation Between Phio Pharmaceuticals and Zura Bio

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

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

Diversification Opportunities for Phio Pharmaceuticals and Zura Bio

0.38

Correlation Coefficient

Phio Pharmaceuticals  Zura Bio

Weak diversification

The 3 months correlation between Phio and Zura is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Phio Pharmaceuticals Corp and Zura Bio Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zura Bio Limited and Phio 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 Phio Pharmaceuticals Corp are associated (or correlated) with Zura Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zura Bio Limited has no effect on the direction of Phio Pharmaceuticals i.e., Phio Pharmaceuticals and Zura Bio go up and down completely randomly.

Pair Corralation between Phio Pharmaceuticals and Zura Bio

Given the investment horizon of 90 days Phio Pharmaceuticals Corp is expected to generate 6.38 times more return on investment than Zura Bio. However, Phio Pharmaceuticals is 6.38 times more volatile than Zura Bio Limited. It trades about 0.06 of its potential returns per unit of risk. Zura Bio Limited is currently generating about -0.14 per unit of risk. If you would invest  193.00  in Phio Pharmaceuticals Corp on December 27, 2024 and sell it today you would lose (61.00) from holding Phio Pharmaceuticals Corp or give up 31.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Phio Pharmaceuticals Corp  vs.  Zura Bio Limited

Phio Pharmaceuticals Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Phio Pharmaceuticals Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Phio Pharmaceuticals displayed solid returns over the last few months and may actually be approaching a breakup point.

Zura Bio Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zura Bio Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Phio Pharmaceuticals and Zura Bio

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

The idea behind Phio Pharmaceuticals Corp and Zura Bio Limited 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.