Correlation Between Assembly Biosciences and Equillium
Can any of the company-specific risk be diversified away by investing in both Assembly Biosciences and Equillium 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 Assembly Biosciences and Equillium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Assembly Biosciences and Equillium, you can compare the effects of market volatilities on Assembly Biosciences and Equillium 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 Assembly Biosciences with a short position of Equillium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assembly Biosciences and Equillium.
Diversification Opportunities for Assembly Biosciences and Equillium
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Assembly and Equillium is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Assembly Biosciences and Equillium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equillium and Assembly Biosciences 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 Assembly Biosciences are associated (or correlated) with Equillium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equillium has no effect on the direction of Assembly Biosciences i.e., Assembly Biosciences and Equillium go up and down completely randomly.
Pair Corralation between Assembly Biosciences and Equillium
Given the investment horizon of 90 days Assembly Biosciences is expected to generate 0.59 times more return on investment than Equillium. However, Assembly Biosciences is 1.7 times less risky than Equillium. It trades about -0.01 of its potential returns per unit of risk. Equillium is currently generating about -0.03 per unit of risk. If you would invest 1,641 in Assembly Biosciences on September 12, 2024 and sell it today you would lose (30.00) from holding Assembly Biosciences or give up 1.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Assembly Biosciences vs. Equillium
Performance |
| Timeline |
| Assembly Biosciences |
| Equillium |
Assembly Biosciences and Equillium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Assembly Biosciences and Equillium
The main advantage of trading using opposite Assembly Biosciences and Equillium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assembly Biosciences position performs unexpectedly, Equillium 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 Equillium will offset losses from the drop in Equillium's long position.| Assembly Biosciences vs. Equillium | Assembly Biosciences vs. DiaMedica Therapeutics | Assembly Biosciences vs. Valneva SE ADR | Assembly Biosciences vs. Vivani Medical |
| Equillium vs. Lyra Therapeutics | Equillium vs. Hookipa Pharma | Equillium vs. Jasper Therapeutics | Equillium vs. Cingulate Warrants |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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