Correlation Between Akero Therapeutics and I Mab
Can any of the company-specific risk be diversified away by investing in both Akero Therapeutics and I Mab 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 I Mab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akero Therapeutics and I Mab, you can compare the effects of market volatilities on Akero Therapeutics and I Mab 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 I Mab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akero Therapeutics and I Mab.
Diversification Opportunities for Akero Therapeutics and I Mab
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Akero and IMAB is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Akero Therapeutics and I Mab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Mab 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 I Mab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Mab has no effect on the direction of Akero Therapeutics i.e., Akero Therapeutics and I Mab go up and down completely randomly.
Pair Corralation between Akero Therapeutics and I Mab
Given the investment horizon of 90 days Akero Therapeutics is expected to generate 1.2 times more return on investment than I Mab. However, Akero Therapeutics is 1.2 times more volatile than I Mab. It trades about 0.12 of its potential returns per unit of risk. I Mab is currently generating about -0.45 per unit of risk. If you would invest 2,867 in Akero Therapeutics on August 24, 2024 and sell it today you would earn a total of 253.00 from holding Akero Therapeutics or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akero Therapeutics vs. I Mab
Performance |
| Timeline |
| Akero Therapeutics |
| I Mab |
Akero Therapeutics and I Mab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akero Therapeutics and I Mab
The main advantage of trading using opposite Akero Therapeutics and I Mab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akero Therapeutics position performs unexpectedly, I Mab 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 I Mab will offset losses from the drop in I Mab's long position.| Akero Therapeutics vs. Lyra Therapeutics | Akero Therapeutics vs. Hookipa Pharma | Akero Therapeutics vs. Cingulate Warrants | Akero Therapeutics vs. SAB Biotherapeutics |
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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