Correlation Between Instil Bio and Alpha Tau

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

By analyzing existing cross correlation between Instil Bio and Alpha Tau Medical, you can compare the effects of market volatilities on Instil Bio and Alpha Tau 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 Alpha Tau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Instil Bio and Alpha Tau.

Diversification Opportunities for Instil Bio and Alpha Tau

-0.06

Correlation Coefficient

Instil Bio  Alpha Tau

Good diversification

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

Pair Corralation between Instil Bio and Alpha Tau

Considering the 90-day investment horizon Instil Bio is expected to generate 5.02 times more return on investment than Alpha Tau. However, Instil Bio is 5.02 times more volatile than Alpha Tau Medical. It trades about 0.12 of its potential returns per unit of risk. Alpha Tau Medical is currently generating about 0.15 per unit of risk. If you would invest  1,474  in Instil Bio on September 4, 2024 and sell it today you would earn a total of  1,284  from holding Instil Bio or generate 87.11% return on investment over 90 days.

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

Instil Bio  vs.  Alpha Tau Medical

Instil Bio

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Instil Bio are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, Instil Bio disclosed solid returns over the last few months and may actually be approaching a breakup point.

Alpha Tau Medical

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Tau Medical are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Alpha Tau unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Instil Bio and Alpha Tau

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

The idea behind Instil Bio and Alpha Tau Medical 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.