Correlation Between Adagene and Bicycle Therapeutics
Can any of the company-specific risk be diversified away by investing in both Adagene and Bicycle 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 Adagene and Bicycle Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adagene and Bicycle Therapeutics, you can compare the effects of market volatilities on Adagene and Bicycle 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 Adagene with a short position of Bicycle Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adagene and Bicycle Therapeutics.
Diversification Opportunities for Adagene and Bicycle Therapeutics
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Adagene and Bicycle is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Adagene and Bicycle Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bicycle Therapeutics and Adagene 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 Adagene are associated (or correlated) with Bicycle Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bicycle Therapeutics has no effect on the direction of Adagene i.e., Adagene and Bicycle Therapeutics go up and down completely randomly.
Pair Corralation between Adagene and Bicycle Therapeutics
Given the investment horizon of 90 days Adagene is expected to under-perform the Bicycle Therapeutics. In addition to that, Adagene is 1.41 times more volatile than Bicycle Therapeutics. It trades about -0.02 of its total potential returns per unit of risk. Bicycle Therapeutics is currently generating about -0.01 per unit of volatility. If you would invest 1,816 in Bicycle Therapeutics on November 9, 2024 and sell it today you would lose (555.00) from holding Bicycle Therapeutics or give up 30.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adagene vs. Bicycle Therapeutics
Performance |
| Timeline |
| Adagene |
| Bicycle Therapeutics |
Adagene and Bicycle Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adagene and Bicycle Therapeutics
The main advantage of trading using opposite Adagene and Bicycle Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adagene position performs unexpectedly, Bicycle 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 Bicycle Therapeutics will offset losses from the drop in Bicycle Therapeutics' long position.| Adagene vs. Aerovate Therapeutics | Adagene vs. Acrivon Therapeutics, Common | Adagene vs. Rezolute | Adagene vs. AN2 Therapeutics |
| Bicycle Therapeutics vs. Ideaya Biosciences | Bicycle Therapeutics vs. AnaptysBio | Bicycle Therapeutics vs. MeiraGTx Holdings PLC | Bicycle Therapeutics vs. Keros Therapeutics |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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