Correlation Between Surrozen and Armata Pharmaceuticals

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

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

Diversification Opportunities for Surrozen and Armata Pharmaceuticals

-0.4

Correlation Coefficient

Surrozen  Armata Pharmaceuticals

Very good diversification

The 3 months correlation between Surrozen and Armata is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Surrozen and Armata Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armata Pharmaceuticals and Surrozen 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 Surrozen are associated (or correlated) with Armata Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armata Pharmaceuticals has no effect on the direction of Surrozen i.e., Surrozen and Armata Pharmaceuticals go up and down completely randomly.

Pair Corralation between Surrozen and Armata Pharmaceuticals

Given the investment horizon of 90 days Surrozen is expected to generate 1.25 times more return on investment than Armata Pharmaceuticals. However, Surrozen is 1.25 times more volatile than Armata Pharmaceuticals. It trades about 0.05 of its potential returns per unit of risk. Armata Pharmaceuticals is currently generating about -0.02 per unit of risk. If you would invest  941.00  in Surrozen on October 9, 2024 and sell it today you would earn a total of  354.00  from holding Surrozen or generate 37.62% return on investment over 90 days.

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

Surrozen  vs.  Armata Pharmaceuticals

Surrozen

Risk-Adjusted Performance

4 of 100

Insignificant

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

Armata Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Surrozen and Armata Pharmaceuticals

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

The idea behind Surrozen and Armata Pharmaceuticals 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.