Correlation Between Connect Biopharma and Omeros
Can any of the company-specific risk be diversified away by investing in both Connect Biopharma and Omeros 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 Connect Biopharma and Omeros into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Connect Biopharma Holdings and Omeros, you can compare the effects of market volatilities on Connect Biopharma and Omeros 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 Connect Biopharma with a short position of Omeros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Connect Biopharma and Omeros.
Diversification Opportunities for Connect Biopharma and Omeros
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Connect and Omeros is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Connect Biopharma Holdings and Omeros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omeros and Connect Biopharma 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 Connect Biopharma Holdings are associated (or correlated) with Omeros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omeros has no effect on the direction of Connect Biopharma i.e., Connect Biopharma and Omeros go up and down completely randomly.
Pair Corralation between Connect Biopharma and Omeros
Given the investment horizon of 90 days Connect Biopharma Holdings is expected to under-perform the Omeros. But the stock apears to be less risky and, when comparing its historical volatility, Connect Biopharma Holdings is 2.17 times less risky than Omeros. The stock trades about -0.04 of its potential returns per unit of risk. The Omeros is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 397.00 in Omeros on September 2, 2024 and sell it today you would earn a total of 738.00 from holding Omeros or generate 185.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Connect Biopharma Holdings vs. Omeros
Performance |
| Timeline |
| Connect Biopharma |
| Omeros |
Connect Biopharma and Omeros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Connect Biopharma and Omeros
The main advantage of trading using opposite Connect Biopharma and Omeros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Connect Biopharma position performs unexpectedly, Omeros 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 Omeros will offset losses from the drop in Omeros' long position.| Connect Biopharma vs. Assembly Biosciences | Connect Biopharma vs. Instil Bio | Connect Biopharma vs. CytomX Therapeutics | Connect Biopharma vs. Achilles Therapeutics PLC |
| Omeros vs. Crinetics Pharmaceuticals | Omeros vs. Enanta Pharmaceuticals | Omeros vs. Amicus Therapeutics | Omeros vs. Connect Biopharma Holdings |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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