Correlation Between Centessa Pharmaceuticals and Ikena Oncology
Can any of the company-specific risk be diversified away by investing in both Centessa Pharmaceuticals and Ikena Oncology 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 Centessa Pharmaceuticals and Ikena Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centessa Pharmaceuticals PLC and Ikena Oncology, you can compare the effects of market volatilities on Centessa Pharmaceuticals and Ikena Oncology 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 Centessa Pharmaceuticals with a short position of Ikena Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centessa Pharmaceuticals and Ikena Oncology.
Diversification Opportunities for Centessa Pharmaceuticals and Ikena Oncology
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Centessa and Ikena is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Centessa Pharmaceuticals PLC and Ikena Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ikena Oncology and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals PLC are associated (or correlated) with Ikena Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ikena Oncology has no effect on the direction of Centessa Pharmaceuticals i.e., Centessa Pharmaceuticals and Ikena Oncology go up and down completely randomly.
Pair Corralation between Centessa Pharmaceuticals and Ikena Oncology
Given the investment horizon of 90 days Centessa Pharmaceuticals PLC is expected to generate 0.82 times more return on investment than Ikena Oncology. However, Centessa Pharmaceuticals PLC is 1.21 times less risky than Ikena Oncology. It trades about 0.09 of its potential returns per unit of risk. Ikena Oncology is currently generating about 0.01 per unit of risk. If you would invest 342.00 in Centessa Pharmaceuticals PLC on November 2, 2024 and sell it today you would earn a total of 1,358 from holding Centessa Pharmaceuticals PLC or generate 396.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Centessa Pharmaceuticals PLC vs. Ikena Oncology
Performance |
| Timeline |
| Centessa Pharmaceuticals |
| Ikena Oncology |
Centessa Pharmaceuticals and Ikena Oncology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centessa Pharmaceuticals and Ikena Oncology
The main advantage of trading using opposite Centessa Pharmaceuticals and Ikena Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centessa Pharmaceuticals position performs unexpectedly, Ikena Oncology 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 Ikena Oncology will offset losses from the drop in Ikena Oncology's long position.The idea behind Centessa Pharmaceuticals PLC and Ikena Oncology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Ikena Oncology vs. Edgewise Therapeutics | Ikena Oncology vs. Design Therapeutics | Ikena Oncology vs. Xilio Development | Ikena Oncology vs. Monte Rosa 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |