Correlation Between Satsuma Pharmaceuticals and Metacrine

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

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

Diversification Opportunities for Satsuma Pharmaceuticals and Metacrine

0.0

Correlation Coefficient

Satsuma Pharmaceuticals  Metacrine

Pay attention - limited upside

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

Pair Corralation between Satsuma Pharmaceuticals and Metacrine

If you would invest (100.00) in Metacrine on December 1, 2024 and sell it today you would earn a total of  100.00  from holding Metacrine 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

Satsuma Pharmaceuticals  vs.  Metacrine

Satsuma Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Satsuma Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Satsuma Pharmaceuticals is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Metacrine

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Satsuma Pharmaceuticals and Metacrine

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

The idea behind Satsuma Pharmaceuticals and Metacrine 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.