Correlation Between Blueprint Medicines and Akero Therapeutics
Can any of the company-specific risk be diversified away by investing in both Blueprint Medicines and Akero 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 Blueprint Medicines and Akero Therapeutics 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 Akero Therapeutics, you can compare the effects of market volatilities on Blueprint Medicines and Akero 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 Blueprint Medicines with a short position of Akero Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blueprint Medicines and Akero Therapeutics.
Diversification Opportunities for Blueprint Medicines and Akero Therapeutics
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Blueprint and Akero is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Blueprint Medicines Corp and Akero Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akero Therapeutics 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 Akero Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akero Therapeutics has no effect on the direction of Blueprint Medicines i.e., Blueprint Medicines and Akero Therapeutics go up and down completely randomly.
Pair Corralation between Blueprint Medicines and Akero Therapeutics
Given the investment horizon of 90 days Blueprint Medicines Corp is expected to generate 0.81 times more return on investment than Akero Therapeutics. However, Blueprint Medicines Corp is 1.24 times less risky than Akero Therapeutics. It trades about 0.2 of its potential returns per unit of risk. Akero Therapeutics is currently generating about 0.1 per unit of risk. If you would invest 8,277 in Blueprint Medicines Corp on August 28, 2024 and sell it today you would earn a total of 1,110 from holding Blueprint Medicines Corp or generate 13.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blueprint Medicines Corp vs. Akero Therapeutics
Performance |
| Timeline |
| Blueprint Medicines Corp |
| Akero Therapeutics |
Blueprint Medicines and Akero Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blueprint Medicines and Akero Therapeutics
The main advantage of trading using opposite Blueprint Medicines and Akero Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blueprint Medicines position performs unexpectedly, Akero 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 Akero Therapeutics will offset losses from the drop in Akero Therapeutics' long position.| Blueprint Medicines vs. Eliem Therapeutics | Blueprint Medicines vs. HCW Biologics | Blueprint Medicines vs. Scpharmaceuticals | Blueprint Medicines vs. Milestone Pharmaceuticals |
| Akero Therapeutics vs. Eliem Therapeutics | Akero Therapeutics vs. HCW Biologics | Akero Therapeutics vs. Scpharmaceuticals | Akero 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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