Correlation Between Protagonist Therapeutics and MeiraGTx Holdings

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

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

Diversification Opportunities for Protagonist Therapeutics and MeiraGTx Holdings

-0.22

Correlation Coefficient

Protagonist Therapeutics  MeiraGTx Holdings

Very good diversification

The 3 months correlation between Protagonist and MeiraGTx is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Protagonist Therapeutics and MeiraGTx Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MeiraGTx Holdings PLC and Protagonist 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 Protagonist Therapeutics are associated (or correlated) with MeiraGTx Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MeiraGTx Holdings PLC has no effect on the direction of Protagonist Therapeutics i.e., Protagonist Therapeutics and MeiraGTx Holdings go up and down completely randomly.

Pair Corralation between Protagonist Therapeutics and MeiraGTx Holdings

Given the investment horizon of 90 days Protagonist Therapeutics is expected to under-perform the MeiraGTx Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Protagonist Therapeutics is 1.58 times less risky than MeiraGTx Holdings. The stock trades about -0.21 of its potential returns per unit of risk. The MeiraGTx Holdings PLC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  593.00  in MeiraGTx Holdings PLC on September 23, 2024 and sell it today you would earn a total of  22.00  from holding MeiraGTx Holdings PLC or generate 3.71% return on investment over 90 days.

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

Protagonist Therapeutics  vs.  MeiraGTx Holdings PLC

Protagonist Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Protagonist Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

MeiraGTx Holdings PLC

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MeiraGTx Holdings PLC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, MeiraGTx Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Protagonist Therapeutics and MeiraGTx Holdings

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

The idea behind Protagonist Therapeutics and MeiraGTx Holdings PLC 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.