Correlation Between Akero Therapeutics and BGNE Old
Can any of the company-specific risk be diversified away by investing in both Akero Therapeutics and BGNE Old 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 Akero Therapeutics and BGNE Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akero Therapeutics and BGNE Old, you can compare the effects of market volatilities on Akero Therapeutics and BGNE Old 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 Akero Therapeutics with a short position of BGNE Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akero Therapeutics and BGNE Old.
Diversification Opportunities for Akero Therapeutics and BGNE Old
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Akero and BGNE is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Akero Therapeutics and BGNE Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGNE Old and Akero Therapeutics 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 Akero Therapeutics are associated (or correlated) with BGNE Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGNE Old has no effect on the direction of Akero Therapeutics i.e., Akero Therapeutics and BGNE Old go up and down completely randomly.
Pair Corralation between Akero Therapeutics and BGNE Old
Given the investment horizon of 90 days Akero Therapeutics is expected to generate 2.59 times more return on investment than BGNE Old. However, Akero Therapeutics is 2.59 times more volatile than BGNE Old. It trades about 0.09 of its potential returns per unit of risk. BGNE Old is currently generating about 0.05 per unit of risk. If you would invest 1,789 in Akero Therapeutics on November 3, 2024 and sell it today you would earn a total of 3,619 from holding Akero Therapeutics or generate 202.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.94% |
| Values | Daily Returns |
Akero Therapeutics vs. BGNE Old
Performance |
| Timeline |
| Akero Therapeutics |
| BGNE Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Akero Therapeutics and BGNE Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akero Therapeutics and BGNE Old
The main advantage of trading using opposite Akero Therapeutics and BGNE Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akero Therapeutics position performs unexpectedly, BGNE Old 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 BGNE Old will offset losses from the drop in BGNE Old's long position.| Akero Therapeutics vs. Terns Pharmaceuticals | Akero Therapeutics vs. Madrigal Pharmaceuticals | Akero Therapeutics vs. Inozyme Pharma | Akero Therapeutics vs. Viking Therapeutics |
| BGNE Old vs. Ascendis Pharma AS | BGNE Old vs. Apellis Pharmaceuticals | BGNE Old vs. Akero Therapeutics | BGNE Old vs. Blueprint Medicines Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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