Correlation Between Bolt Biotherapeutics and Terns Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Bolt Biotherapeutics and Terns Pharmaceuticals 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 Bolt Biotherapeutics and Terns Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bolt Biotherapeutics and Terns Pharmaceuticals, you can compare the effects of market volatilities on Bolt Biotherapeutics and Terns Pharmaceuticals 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 Bolt Biotherapeutics with a short position of Terns Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bolt Biotherapeutics and Terns Pharmaceuticals.
Diversification Opportunities for Bolt Biotherapeutics and Terns Pharmaceuticals
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bolt and Terns is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Bolt Biotherapeutics and Terns Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terns Pharmaceuticals and Bolt Biotherapeutics 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 Bolt Biotherapeutics are associated (or correlated) with Terns Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terns Pharmaceuticals has no effect on the direction of Bolt Biotherapeutics i.e., Bolt Biotherapeutics and Terns Pharmaceuticals go up and down completely randomly.
Pair Corralation between Bolt Biotherapeutics and Terns Pharmaceuticals
Given the investment horizon of 90 days Bolt Biotherapeutics is expected to under-perform the Terns Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Bolt Biotherapeutics is 1.32 times less risky than Terns Pharmaceuticals. The stock trades about -0.21 of its potential returns per unit of risk. The Terns Pharmaceuticals is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 651.00 in Terns Pharmaceuticals on August 28, 2024 and sell it today you would lose (72.00) from holding Terns Pharmaceuticals or give up 11.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bolt Biotherapeutics vs. Terns Pharmaceuticals
Performance |
| Timeline |
| Bolt Biotherapeutics |
| Terns Pharmaceuticals |
Bolt Biotherapeutics and Terns Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bolt Biotherapeutics and Terns Pharmaceuticals
The main advantage of trading using opposite Bolt Biotherapeutics and Terns Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bolt Biotherapeutics position performs unexpectedly, Terns Pharmaceuticals 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 Terns Pharmaceuticals will offset losses from the drop in Terns Pharmaceuticals' long position.| Bolt Biotherapeutics vs. Eliem Therapeutics | Bolt Biotherapeutics vs. HCW Biologics | Bolt Biotherapeutics vs. Scpharmaceuticals | Bolt Biotherapeutics vs. Milestone Pharmaceuticals |
| Terns Pharmaceuticals vs. Capricor Therapeutics | Terns Pharmaceuticals vs. Soleno Therapeutics | Terns Pharmaceuticals vs. Bio Path Holdings | Terns Pharmaceuticals vs. Moleculin Biotech |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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