Correlation Between Instil Bio and Athira Pharma

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

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

Diversification Opportunities for Instil Bio and Athira Pharma

0.49

Correlation Coefficient

Instil Bio  Athira Pharma

Very weak diversification

The 3 months correlation between Instil and Athira is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Instil Bio and Athira Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athira Pharma and Instil Bio 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 Instil Bio are associated (or correlated) with Athira Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athira Pharma has no effect on the direction of Instil Bio i.e., Instil Bio and Athira Pharma go up and down completely randomly.

Pair Corralation between Instil Bio and Athira Pharma

Considering the 90-day investment horizon Instil Bio is expected to generate 1.66 times more return on investment than Athira Pharma. However, Instil Bio is 1.66 times more volatile than Athira Pharma. It trades about 0.02 of its potential returns per unit of risk. Athira Pharma is currently generating about -0.19 per unit of risk. If you would invest  1,899  in Instil Bio on December 28, 2024 and sell it today you would lose (91.00) from holding Instil Bio or give up 4.79% of portfolio value over 90 days.

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

Instil Bio  vs.  Athira Pharma

Instil Bio

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Instil Bio are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, Instil Bio may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Athira Pharma

Risk-Adjusted Performance

Very Weak

Over the last 90 days Athira Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Instil Bio and Athira Pharma

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

The idea behind Instil Bio and Athira Pharma 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.