Correlation Between 60 Degrees and Orchestra BioMed

Can any of the company-specific risk be diversified away by investing in both 60 Degrees and Orchestra BioMed 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 60 Degrees and Orchestra BioMed into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 60 Degrees Pharmaceuticals, and Orchestra BioMed Holdings, you can compare the effects of market volatilities on 60 Degrees and Orchestra BioMed 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 60 Degrees with a short position of Orchestra BioMed. Check out your portfolio center. Please also check ongoing floating volatility patterns of 60 Degrees and Orchestra BioMed.

Diversification Opportunities for 60 Degrees and Orchestra BioMed

0.06

Correlation Coefficient

60 Degrees  Orchestra BioMed

Significant diversification

The 3 months correlation between SXTPW and Orchestra is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding 60 Degrees Pharmaceuticals, and Orchestra BioMed Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orchestra BioMed Holdings and 60 Degrees 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 60 Degrees Pharmaceuticals, are associated (or correlated) with Orchestra BioMed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orchestra BioMed Holdings has no effect on the direction of 60 Degrees i.e., 60 Degrees and Orchestra BioMed go up and down completely randomly.

Pair Corralation between 60 Degrees and Orchestra BioMed

Assuming the 90 days horizon 60 Degrees Pharmaceuticals, is expected to generate 4.0 times more return on investment than Orchestra BioMed. However, 60 Degrees is 4.0 times more volatile than Orchestra BioMed Holdings. It trades about 0.08 of its potential returns per unit of risk. Orchestra BioMed Holdings is currently generating about 0.05 per unit of risk. If you would invest  3.50  in 60 Degrees Pharmaceuticals, on December 29, 2024 and sell it today you would lose (1.10) from holding 60 Degrees Pharmaceuticals, or give up 31.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	80.33%
Values	Daily Returns

60 Degrees Pharmaceuticals,  vs.  Orchestra BioMed Holdings

60 Degrees Pharmaceu

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in 60 Degrees Pharmaceuticals, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, 60 Degrees showed solid returns over the last few months and may actually be approaching a breakup point.

Orchestra BioMed Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Orchestra BioMed Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting forward indicators, Orchestra BioMed displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 60 Degrees and Orchestra BioMed

The main advantage of trading using opposite 60 Degrees and Orchestra BioMed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 60 Degrees position performs unexpectedly, Orchestra BioMed 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 Orchestra BioMed will offset losses from the drop in Orchestra BioMed's long position.

The idea behind 60 Degrees Pharmaceuticals, and Orchestra BioMed Holdings 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.