Correlation Between BioXcel Therapeutics and Seres Therapeutics
Can any of the company-specific risk be diversified away by investing in both BioXcel Therapeutics and Seres 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 BioXcel Therapeutics and Seres Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioXcel Therapeutics and Seres Therapeutics, you can compare the effects of market volatilities on BioXcel Therapeutics and Seres 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 BioXcel Therapeutics with a short position of Seres Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioXcel Therapeutics and Seres Therapeutics.
Diversification Opportunities for BioXcel Therapeutics and Seres Therapeutics
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between BioXcel and Seres is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding BioXcel Therapeutics and Seres Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seres Therapeutics 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 Seres Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seres Therapeutics has no effect on the direction of BioXcel Therapeutics i.e., BioXcel Therapeutics and Seres Therapeutics go up and down completely randomly.
Pair Corralation between BioXcel Therapeutics and Seres Therapeutics
Given the investment horizon of 90 days BioXcel Therapeutics is expected to under-perform the Seres Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, BioXcel Therapeutics is 1.25 times less risky than Seres Therapeutics. The stock trades about -0.32 of its potential returns per unit of risk. The Seres Therapeutics is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 82.00 in Seres Therapeutics on September 1, 2024 and sell it today you would earn a total of 16.00 from holding Seres Therapeutics or generate 19.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioXcel Therapeutics vs. Seres Therapeutics
Performance |
| Timeline |
| BioXcel Therapeutics |
| Seres Therapeutics |
BioXcel Therapeutics and Seres Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioXcel Therapeutics and Seres Therapeutics
The main advantage of trading using opposite BioXcel Therapeutics and Seres Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioXcel Therapeutics position performs unexpectedly, Seres 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 Seres Therapeutics will offset losses from the drop in Seres Therapeutics' long position.| BioXcel Therapeutics vs. Terns Pharmaceuticals | BioXcel Therapeutics vs. Amylyx Pharmaceuticals | BioXcel Therapeutics vs. Acumen Pharmaceuticals | BioXcel Therapeutics vs. Inozyme Pharma |
| Seres Therapeutics vs. Syros Pharmaceuticals | Seres Therapeutics vs. Iovance Biotherapeutics | Seres Therapeutics vs. Veracyte | Seres Therapeutics vs. Fate 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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