Correlation Between Zenas BioPharma, and Amylyx Pharmaceuticals

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

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

Diversification Opportunities for Zenas BioPharma, and Amylyx Pharmaceuticals

0.01

Correlation Coefficient

Zenas BioPharma,  Amylyx Pharmaceuticals

Significant diversification

The 3 months correlation between Zenas and Amylyx is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Zenas BioPharma, Common and Amylyx Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amylyx Pharmaceuticals and Zenas BioPharma, 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 Zenas BioPharma, Common are associated (or correlated) with Amylyx Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amylyx Pharmaceuticals has no effect on the direction of Zenas BioPharma, i.e., Zenas BioPharma, and Amylyx Pharmaceuticals go up and down completely randomly.

Pair Corralation between Zenas BioPharma, and Amylyx Pharmaceuticals

Given the investment horizon of 90 days Zenas BioPharma, Common is expected to under-perform the Amylyx Pharmaceuticals. In addition to that, Zenas BioPharma, is 1.04 times more volatile than Amylyx Pharmaceuticals. It trades about -0.14 of its total potential returns per unit of risk. Amylyx Pharmaceuticals is currently generating about 0.11 per unit of volatility. If you would invest  291.00  in Amylyx Pharmaceuticals on September 21, 2024 and sell it today you would earn a total of  105.00  from holding Amylyx Pharmaceuticals or generate 36.08% return on investment over 90 days.

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

Zenas BioPharma, Common  vs.  Amylyx Pharmaceuticals

Zenas BioPharma, Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zenas BioPharma, Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's forward indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Amylyx Pharmaceuticals

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amylyx Pharmaceuticals are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating essential indicators, Amylyx Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zenas BioPharma, and Amylyx Pharmaceuticals

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

The idea behind Zenas BioPharma, Common and Amylyx Pharmaceuticals 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.