Correlation Between Blueprint Medicines and Akebia Ther
Can any of the company-specific risk be diversified away by investing in both Blueprint Medicines and Akebia Ther 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 Blueprint Medicines and Akebia Ther into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blueprint Medicines Corp and Akebia Ther, you can compare the effects of market volatilities on Blueprint Medicines and Akebia Ther 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 Blueprint Medicines with a short position of Akebia Ther. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blueprint Medicines and Akebia Ther.
Diversification Opportunities for Blueprint Medicines and Akebia Ther
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blueprint and Akebia is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Blueprint Medicines Corp and Akebia Ther in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akebia Ther and Blueprint Medicines 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 Blueprint Medicines Corp are associated (or correlated) with Akebia Ther. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akebia Ther has no effect on the direction of Blueprint Medicines i.e., Blueprint Medicines and Akebia Ther go up and down completely randomly.
Pair Corralation between Blueprint Medicines and Akebia Ther
Given the investment horizon of 90 days Blueprint Medicines Corp is expected to generate 1.06 times more return on investment than Akebia Ther. However, Blueprint Medicines is 1.06 times more volatile than Akebia Ther. It trades about 0.23 of its potential returns per unit of risk. Akebia Ther is currently generating about 0.24 per unit of risk. If you would invest 9,063 in Blueprint Medicines Corp on November 9, 2024 and sell it today you would earn a total of 1,899 from holding Blueprint Medicines Corp or generate 20.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blueprint Medicines Corp vs. Akebia Ther
Performance |
| Timeline |
| Blueprint Medicines Corp |
| Akebia Ther |
Blueprint Medicines and Akebia Ther Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blueprint Medicines and Akebia Ther
The main advantage of trading using opposite Blueprint Medicines and Akebia Ther positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blueprint Medicines position performs unexpectedly, Akebia Ther 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 Akebia Ther will offset losses from the drop in Akebia Ther's long position.| Blueprint Medicines vs. Terns Pharmaceuticals | Blueprint Medicines vs. Amylyx Pharmaceuticals | Blueprint Medicines vs. Acumen Pharmaceuticals | Blueprint Medicines vs. Inozyme Pharma |
| Akebia Ther vs. Protalix Biotherapeutics | Akebia Ther vs. Cidara Therapeutics | Akebia Ther vs. X4 Pharmaceuticals | Akebia Ther vs. Seres Therapeutics |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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