Correlation Between Zura Bio and Western Acquisition

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

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

Diversification Opportunities for Zura Bio and Western Acquisition

0.55

Correlation Coefficient

Zura Bio  Western Acquisition

Very weak diversification

The 3 months correlation between Zura and Western is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Zura Bio Limited and Western Acquisition Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Acquisition and Zura 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 Zura Bio Limited are associated (or correlated) with Western Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Acquisition has no effect on the direction of Zura Bio i.e., Zura Bio and Western Acquisition go up and down completely randomly.

Pair Corralation between Zura Bio and Western Acquisition

Given the investment horizon of 90 days Zura Bio Limited is expected to generate 10.4 times more return on investment than Western Acquisition. However, Zura Bio is 10.4 times more volatile than Western Acquisition Ventures. It trades about 0.02 of its potential returns per unit of risk. Western Acquisition Ventures is currently generating about 0.01 per unit of risk. If you would invest  816.00  in Zura Bio Limited on October 3, 2024 and sell it today you would lose (566.00) from holding Zura Bio Limited or give up 69.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.95%
Values	Daily Returns

Zura Bio Limited  vs.  Western Acquisition Ventures

Zura Bio Limited

Risk-Adjusted Performance

0 of 100

Very Weak

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

Western Acquisition

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Western Acquisition Ventures are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Western Acquisition is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Zura Bio and Western Acquisition

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

The idea behind Zura Bio Limited and Western Acquisition Ventures 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.