Correlation Between Biomea Fusion and Stoke Therapeutics
Can any of the company-specific risk be diversified away by investing in both Biomea Fusion and Stoke 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 Biomea Fusion and Stoke Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biomea Fusion and Stoke Therapeutics, you can compare the effects of market volatilities on Biomea Fusion and Stoke 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 Biomea Fusion with a short position of Stoke Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biomea Fusion and Stoke Therapeutics.
Diversification Opportunities for Biomea Fusion and Stoke Therapeutics
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Biomea and Stoke is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Biomea Fusion and Stoke Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stoke Therapeutics and Biomea Fusion 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 Biomea Fusion are associated (or correlated) with Stoke Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stoke Therapeutics has no effect on the direction of Biomea Fusion i.e., Biomea Fusion and Stoke Therapeutics go up and down completely randomly.
Pair Corralation between Biomea Fusion and Stoke Therapeutics
Given the investment horizon of 90 days Biomea Fusion is expected to under-perform the Stoke Therapeutics. In addition to that, Biomea Fusion is 1.28 times more volatile than Stoke Therapeutics. It trades about -0.61 of its total potential returns per unit of risk. Stoke Therapeutics is currently generating about -0.03 per unit of volatility. If you would invest 1,191 in Stoke Therapeutics on August 26, 2024 and sell it today you would lose (48.00) from holding Stoke Therapeutics or give up 4.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biomea Fusion vs. Stoke Therapeutics
Performance |
| Timeline |
| Biomea Fusion |
| Stoke Therapeutics |
Biomea Fusion and Stoke Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biomea Fusion and Stoke Therapeutics
The main advantage of trading using opposite Biomea Fusion and Stoke Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biomea Fusion position performs unexpectedly, Stoke 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 Stoke Therapeutics will offset losses from the drop in Stoke Therapeutics' long position.| Biomea Fusion vs. Edgewise Therapeutics | Biomea Fusion vs. Werewolf Therapeutics | Biomea Fusion vs. Cullinan Oncology LLC | Biomea Fusion vs. Design Therapeutics |
| Stoke Therapeutics vs. Eliem Therapeutics | Stoke Therapeutics vs. HCW Biologics | Stoke Therapeutics vs. Scpharmaceuticals | Stoke Therapeutics 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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