Correlation Between Arcellx and Summit Therapeutics
Can any of the company-specific risk be diversified away by investing in both Arcellx and Summit Therapeutics 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 Arcellx and Summit Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcellx and Summit Therapeutics PLC, you can compare the effects of market volatilities on Arcellx and Summit Therapeutics 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 Arcellx with a short position of Summit Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcellx and Summit Therapeutics.
Diversification Opportunities for Arcellx and Summit Therapeutics
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Arcellx and Summit is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Arcellx and Summit Therapeutics PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Therapeutics PLC and Arcellx 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 Arcellx are associated (or correlated) with Summit Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Therapeutics PLC has no effect on the direction of Arcellx i.e., Arcellx and Summit Therapeutics go up and down completely randomly.
Pair Corralation between Arcellx and Summit Therapeutics
Given the investment horizon of 90 days Arcellx is expected to generate 20.11 times less return on investment than Summit Therapeutics. But when comparing it to its historical volatility, Arcellx is 6.02 times less risky than Summit Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Summit Therapeutics PLC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 425.00 in Summit Therapeutics PLC on November 3, 2024 and sell it today you would earn a total of 1,725 from holding Summit Therapeutics PLC or generate 405.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arcellx vs. Summit Therapeutics PLC
Performance |
| Timeline |
| Arcellx |
| Summit Therapeutics PLC |
Arcellx and Summit Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcellx and Summit Therapeutics
The main advantage of trading using opposite Arcellx and Summit Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcellx position performs unexpectedly, Summit Therapeutics 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 Summit Therapeutics will offset losses from the drop in Summit Therapeutics' long position.| Arcellx vs. Nuvalent | Arcellx vs. Ventyx Biosciences | Arcellx vs. Amylyx Pharmaceuticals | Arcellx vs. Day One Biopharmaceuticals |
| Summit Therapeutics vs. Nkarta Inc | Summit Therapeutics vs. Cullinan Oncology LLC | Summit Therapeutics vs. Kezar Life Sciences | Summit Therapeutics vs. Kronos Bio |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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