Correlation Between Akebia Ther and Galmed Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Akebia Ther and Galmed 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 Akebia Ther and Galmed Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akebia Ther and Galmed Pharmaceuticals, you can compare the effects of market volatilities on Akebia Ther and Galmed 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 Akebia Ther with a short position of Galmed Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akebia Ther and Galmed Pharmaceuticals.
Diversification Opportunities for Akebia Ther and Galmed Pharmaceuticals
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Akebia and Galmed is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Akebia Ther and Galmed Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galmed Pharmaceuticals and Akebia Ther 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 Akebia Ther are associated (or correlated) with Galmed Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galmed Pharmaceuticals has no effect on the direction of Akebia Ther i.e., Akebia Ther and Galmed Pharmaceuticals go up and down completely randomly.
Pair Corralation between Akebia Ther and Galmed Pharmaceuticals
Given the investment horizon of 90 days Akebia Ther is expected to generate 1.08 times more return on investment than Galmed Pharmaceuticals. However, Akebia Ther is 1.08 times more volatile than Galmed Pharmaceuticals. It trades about 0.23 of its potential returns per unit of risk. Galmed Pharmaceuticals is currently generating about -0.46 per unit of risk. If you would invest 159.00 in Akebia Ther on August 26, 2024 and sell it today you would earn a total of 29.00 from holding Akebia Ther or generate 18.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akebia Ther vs. Galmed Pharmaceuticals
Performance |
| Timeline |
| Akebia Ther |
| Galmed Pharmaceuticals |
Akebia Ther and Galmed Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akebia Ther and Galmed Pharmaceuticals
The main advantage of trading using opposite Akebia Ther and Galmed Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akebia Ther position performs unexpectedly, Galmed 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 Galmed Pharmaceuticals will offset losses from the drop in Galmed Pharmaceuticals' long position.| Akebia Ther vs. Protalix Biotherapeutics | Akebia Ther vs. Cidara Therapeutics | Akebia Ther vs. X4 Pharmaceuticals | Akebia Ther vs. Seres Therapeutics |
| Galmed Pharmaceuticals vs. Affimed NV | Galmed Pharmaceuticals vs. Abeona Therapeutics | Galmed Pharmaceuticals vs. Akebia Ther | Galmed Pharmaceuticals vs. Kodiak Sciences |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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