Correlation Between Abcam PLC and Aeglea Bio
Can any of the company-specific risk be diversified away by investing in both Abcam PLC and Aeglea Bio 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 Abcam PLC and Aeglea Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abcam PLC and Aeglea Bio Therapeutics, you can compare the effects of market volatilities on Abcam PLC and Aeglea Bio 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 Abcam PLC with a short position of Aeglea Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abcam PLC and Aeglea Bio.
Diversification Opportunities for Abcam PLC and Aeglea Bio
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Abcam and Aeglea is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Abcam PLC and Aeglea Bio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeglea Bio Therapeutics and Abcam PLC 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 Abcam PLC are associated (or correlated) with Aeglea Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeglea Bio Therapeutics has no effect on the direction of Abcam PLC i.e., Abcam PLC and Aeglea Bio go up and down completely randomly.
Pair Corralation between Abcam PLC and Aeglea Bio
Given the investment horizon of 90 days Abcam PLC is expected to generate 5.01 times less return on investment than Aeglea Bio. But when comparing it to its historical volatility, Abcam PLC is 7.47 times less risky than Aeglea Bio. It trades about 0.1 of its potential returns per unit of risk. Aeglea Bio Therapeutics is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Aeglea Bio Therapeutics on September 13, 2024 and sell it today you would earn a total of 23.00 from holding Aeglea Bio Therapeutics or generate 63.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.31% |
| Values | Daily Returns |
Abcam PLC vs. Aeglea Bio Therapeutics
Performance |
| Timeline |
| Abcam PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Aeglea Bio Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Abcam PLC and Aeglea Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abcam PLC and Aeglea Bio
The main advantage of trading using opposite Abcam PLC and Aeglea Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abcam PLC position performs unexpectedly, Aeglea Bio 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 Aeglea Bio will offset losses from the drop in Aeglea Bio's long position.| Abcam PLC vs. Anebulo Pharmaceuticals | Abcam PLC vs. Adagene | Abcam PLC vs. Acrivon Therapeutics, Common | Abcam PLC vs. AnaptysBio |
| Aeglea Bio vs. Edgewise Therapeutics | Aeglea Bio vs. Ikena Oncology | Aeglea Bio vs. Design Therapeutics | Aeglea Bio vs. Xilio Development |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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