Correlation Between Bicycle Therapeutics and Adagene
Can any of the company-specific risk be diversified away by investing in both Bicycle Therapeutics and Adagene 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 Bicycle Therapeutics and Adagene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bicycle Therapeutics and Adagene, you can compare the effects of market volatilities on Bicycle Therapeutics and Adagene 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 Bicycle Therapeutics with a short position of Adagene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bicycle Therapeutics and Adagene.
Diversification Opportunities for Bicycle Therapeutics and Adagene
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bicycle and Adagene is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bicycle Therapeutics and Adagene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adagene and Bicycle 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 Bicycle Therapeutics are associated (or correlated) with Adagene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adagene has no effect on the direction of Bicycle Therapeutics i.e., Bicycle Therapeutics and Adagene go up and down completely randomly.
Pair Corralation between Bicycle Therapeutics and Adagene
Given the investment horizon of 90 days Bicycle Therapeutics is expected to generate 37.99 times less return on investment than Adagene. But when comparing it to its historical volatility, Bicycle Therapeutics is 1.66 times less risky than Adagene. It trades about 0.0 of its potential returns per unit of risk. Adagene is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 133.00 in Adagene on August 27, 2024 and sell it today you would earn a total of 86.00 from holding Adagene or generate 64.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bicycle Therapeutics vs. Adagene
Performance |
| Timeline |
| Bicycle Therapeutics |
| Adagene |
Bicycle Therapeutics and Adagene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bicycle Therapeutics and Adagene
The main advantage of trading using opposite Bicycle Therapeutics and Adagene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bicycle Therapeutics position performs unexpectedly, Adagene 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 Adagene will offset losses from the drop in Adagene's long position.| Bicycle Therapeutics vs. Ideaya Biosciences | Bicycle Therapeutics vs. AnaptysBio | Bicycle Therapeutics vs. MeiraGTx Holdings PLC | Bicycle Therapeutics vs. Keros Therapeutics |
| Adagene vs. Eliem Therapeutics | Adagene vs. HCW Biologics | Adagene vs. Scpharmaceuticals | Adagene vs. Milestone Pharmaceuticals |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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