Correlation Between Armata Pharmaceuticals and Agios Pharm
Can any of the company-specific risk be diversified away by investing in both Armata Pharmaceuticals and Agios Pharm 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 Armata Pharmaceuticals and Agios Pharm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armata Pharmaceuticals and Agios Pharm, you can compare the effects of market volatilities on Armata Pharmaceuticals and Agios Pharm 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 Armata Pharmaceuticals with a short position of Agios Pharm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armata Pharmaceuticals and Agios Pharm.
Diversification Opportunities for Armata Pharmaceuticals and Agios Pharm
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Armata and Agios is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Armata Pharmaceuticals and Agios Pharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agios Pharm and Armata Pharmaceuticals 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 Armata Pharmaceuticals are associated (or correlated) with Agios Pharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agios Pharm has no effect on the direction of Armata Pharmaceuticals i.e., Armata Pharmaceuticals and Agios Pharm go up and down completely randomly.
Pair Corralation between Armata Pharmaceuticals and Agios Pharm
Given the investment horizon of 90 days Armata Pharmaceuticals is expected to generate 1.44 times more return on investment than Agios Pharm. However, Armata Pharmaceuticals is 1.44 times more volatile than Agios Pharm. It trades about 0.13 of its potential returns per unit of risk. Agios Pharm is currently generating about 0.07 per unit of risk. If you would invest 202.00 in Armata Pharmaceuticals on October 26, 2024 and sell it today you would earn a total of 17.00 from holding Armata Pharmaceuticals or generate 8.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Armata Pharmaceuticals vs. Agios Pharm
Performance |
| Timeline |
| Armata Pharmaceuticals |
| Agios Pharm |
Armata Pharmaceuticals and Agios Pharm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armata Pharmaceuticals and Agios Pharm
The main advantage of trading using opposite Armata Pharmaceuticals and Agios Pharm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armata Pharmaceuticals position performs unexpectedly, Agios Pharm 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 Agios Pharm will offset losses from the drop in Agios Pharm's long position.The idea behind Armata Pharmaceuticals and Agios Pharm pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Agios Pharm vs. Surrozen | Agios Pharm vs. Armata Pharmaceuticals | Agios Pharm vs. Pasithea Therapeutics Corp | Agios Pharm vs. Aditxt Inc |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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