Correlation Between Aileron Therapeutics and Bicycle Therapeutics
Can any of the company-specific risk be diversified away by investing in both Aileron Therapeutics 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 Aileron Therapeutics and Bicycle Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aileron Therapeutics and Bicycle Therapeutics, you can compare the effects of market volatilities on Aileron Therapeutics 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 Aileron Therapeutics with a short position of Bicycle Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aileron Therapeutics and Bicycle Therapeutics.
Diversification Opportunities for Aileron Therapeutics and Bicycle Therapeutics
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aileron and Bicycle is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aileron Therapeutics and Bicycle Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bicycle Therapeutics and Aileron 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 Aileron Therapeutics 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 Aileron Therapeutics i.e., Aileron Therapeutics and Bicycle Therapeutics go up and down completely randomly.
Pair Corralation between Aileron Therapeutics and Bicycle Therapeutics
Given the investment horizon of 90 days Aileron Therapeutics is expected to under-perform the Bicycle Therapeutics. In addition to that, Aileron Therapeutics is 1.98 times more volatile than Bicycle Therapeutics. It trades about -0.41 of its total potential returns per unit of risk. Bicycle Therapeutics is currently generating about -0.26 per unit of volatility. If you would invest 2,432 in Bicycle Therapeutics on September 12, 2024 and sell it today you would lose (346.00) from holding Bicycle Therapeutics or give up 14.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aileron Therapeutics vs. Bicycle Therapeutics
Performance |
| Timeline |
| Aileron Therapeutics |
| Bicycle Therapeutics |
Aileron Therapeutics and Bicycle Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aileron Therapeutics and Bicycle Therapeutics
The main advantage of trading using opposite Aileron Therapeutics and Bicycle Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aileron Therapeutics 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.| Aileron Therapeutics vs. Bio Path Holdings | Aileron Therapeutics vs. Benitec Biopharma Ltd | Aileron Therapeutics vs. Artelo Biosciences | Aileron Therapeutics vs. Histogen |
| Bicycle Therapeutics vs. Equillium | Bicycle Therapeutics vs. DiaMedica Therapeutics | Bicycle Therapeutics vs. Valneva SE ADR | Bicycle Therapeutics vs. Vivani Medical |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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