Correlation Between Check Cap and Aileron Therapeutics
Can any of the company-specific risk be diversified away by investing in both Check Cap and Aileron 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 Check Cap and Aileron Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Check Cap and Aileron Therapeutics, you can compare the effects of market volatilities on Check Cap and Aileron 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 Check Cap with a short position of Aileron Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Cap and Aileron Therapeutics.
Diversification Opportunities for Check Cap and Aileron Therapeutics
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Check and Aileron is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Check Cap and Aileron Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aileron Therapeutics and Check Cap 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 Check Cap are associated (or correlated) with Aileron Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aileron Therapeutics has no effect on the direction of Check Cap i.e., Check Cap and Aileron Therapeutics go up and down completely randomly.
Pair Corralation between Check Cap and Aileron Therapeutics
Given the investment horizon of 90 days Check Cap is expected to generate 0.95 times more return on investment than Aileron Therapeutics. However, Check Cap is 1.05 times less risky than Aileron Therapeutics. It trades about -0.29 of its potential returns per unit of risk. Aileron Therapeutics is currently generating about -0.34 per unit of risk. If you would invest 115.00 in Check Cap on August 26, 2024 and sell it today you would lose (33.00) from holding Check Cap or give up 28.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Check Cap vs. Aileron Therapeutics
Performance |
| Timeline |
| Check Cap |
| Aileron Therapeutics |
Check Cap and Aileron Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Cap and Aileron Therapeutics
The main advantage of trading using opposite Check Cap and Aileron Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Cap position performs unexpectedly, Aileron 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 Aileron Therapeutics will offset losses from the drop in Aileron Therapeutics' long position.| Check Cap vs. Fonar | Check Cap vs. Burning Rock Biotech | Check Cap vs. Sera Prognostics | Check Cap vs. Psychemedics |
| Aileron Therapeutics vs. Bio Path Holdings | Aileron Therapeutics vs. Benitec Biopharma Ltd | Aileron Therapeutics vs. Artelo Biosciences | Aileron Therapeutics vs. Histogen |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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