Correlation Between BioXcel Therapeutics and Alnylam Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both BioXcel Therapeutics and Alnylam 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 BioXcel Therapeutics and Alnylam Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioXcel Therapeutics and Alnylam Pharmaceuticals, you can compare the effects of market volatilities on BioXcel Therapeutics and Alnylam 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 BioXcel Therapeutics with a short position of Alnylam Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioXcel Therapeutics and Alnylam Pharmaceuticals.
Diversification Opportunities for BioXcel Therapeutics and Alnylam Pharmaceuticals
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between BioXcel and Alnylam is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding BioXcel Therapeutics and Alnylam Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alnylam Pharmaceuticals and BioXcel 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 BioXcel Therapeutics are associated (or correlated) with Alnylam Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alnylam Pharmaceuticals has no effect on the direction of BioXcel Therapeutics i.e., BioXcel Therapeutics and Alnylam Pharmaceuticals go up and down completely randomly.
Pair Corralation between BioXcel Therapeutics and Alnylam Pharmaceuticals
Given the investment horizon of 90 days BioXcel Therapeutics is expected to under-perform the Alnylam Pharmaceuticals. In addition to that, BioXcel Therapeutics is 2.14 times more volatile than Alnylam Pharmaceuticals. It trades about -0.22 of its total potential returns per unit of risk. Alnylam Pharmaceuticals is currently generating about -0.19 per unit of volatility. If you would invest 28,691 in Alnylam Pharmaceuticals on August 28, 2024 and sell it today you would lose (3,593) from holding Alnylam Pharmaceuticals or give up 12.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioXcel Therapeutics vs. Alnylam Pharmaceuticals
Performance |
| Timeline |
| BioXcel Therapeutics |
| Alnylam Pharmaceuticals |
BioXcel Therapeutics and Alnylam Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioXcel Therapeutics and Alnylam Pharmaceuticals
The main advantage of trading using opposite BioXcel Therapeutics and Alnylam Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioXcel Therapeutics position performs unexpectedly, Alnylam 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 Alnylam Pharmaceuticals will offset losses from the drop in Alnylam Pharmaceuticals' long position.| BioXcel Therapeutics vs. Terns Pharmaceuticals | BioXcel Therapeutics vs. Amylyx Pharmaceuticals | BioXcel Therapeutics vs. Acumen Pharmaceuticals | BioXcel Therapeutics vs. Inozyme Pharma |
| Alnylam Pharmaceuticals vs. ProQR Therapeutics BV | Alnylam Pharmaceuticals vs. Wave Life Sciences | Alnylam Pharmaceuticals vs. Blueprint Medicines Corp | Alnylam Pharmaceuticals vs. Apellis 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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