Correlation Between Shattuck Labs and I Mab

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

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

Diversification Opportunities for Shattuck Labs and I Mab

-0.11

Correlation Coefficient

Shattuck Labs  I Mab

Good diversification

The 3 months correlation between Shattuck and IMAB is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Shattuck Labs and I Mab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Mab and Shattuck Labs 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 Shattuck Labs are associated (or correlated) with I Mab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Mab has no effect on the direction of Shattuck Labs i.e., Shattuck Labs and I Mab go up and down completely randomly.

Pair Corralation between Shattuck Labs and I Mab

Given the investment horizon of 90 days Shattuck Labs is expected to generate 1.77 times more return on investment than I Mab. However, Shattuck Labs is 1.77 times more volatile than I Mab. It trades about 0.06 of its potential returns per unit of risk. I Mab is currently generating about -0.02 per unit of risk. If you would invest  104.00  in Shattuck Labs on December 19, 2024 and sell it today you would earn a total of  12.00  from holding Shattuck Labs or generate 11.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Shattuck Labs  vs.  I Mab

Shattuck Labs

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shattuck Labs are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Shattuck Labs disclosed solid returns over the last few months and may actually be approaching a breakup point.

I Mab

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Shattuck Labs and I Mab

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

The idea behind Shattuck Labs and I Mab 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.