Correlation Between Summit Therapeutics and Aeglea Bio

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

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

Diversification Opportunities for Summit Therapeutics and Aeglea Bio

-0.46

Correlation Coefficient

Summit Therapeutics  Aeglea Bio

Very good diversification

The 3 months correlation between Summit and Aeglea is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Summit Therapeutics PLC and Aeglea Bio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeglea Bio Therapeutics and Summit 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 Summit Therapeutics PLC are associated (or correlated) with Aeglea Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeglea Bio Therapeutics has no effect on the direction of Summit Therapeutics i.e., Summit Therapeutics and Aeglea Bio go up and down completely randomly.

Pair Corralation between Summit Therapeutics and Aeglea Bio

If you would invest  59.00  in Aeglea Bio Therapeutics on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Aeglea Bio Therapeutics or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Summit Therapeutics PLC  vs.  Aeglea Bio Therapeutics

Summit Therapeutics PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Summit Therapeutics PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Aeglea Bio Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Summit Therapeutics and Aeglea Bio

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

The idea behind Summit Therapeutics PLC and Aeglea Bio 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.