Correlation Between Connect Biopharma and Protagenic Therapeutics
Can any of the company-specific risk be diversified away by investing in both Connect Biopharma and Protagenic 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 Connect Biopharma and Protagenic Therapeutics 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 Protagenic Therapeutics, you can compare the effects of market volatilities on Connect Biopharma and Protagenic 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 Connect Biopharma with a short position of Protagenic Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Connect Biopharma and Protagenic Therapeutics.
Diversification Opportunities for Connect Biopharma and Protagenic Therapeutics
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Connect and Protagenic is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Connect Biopharma Holdings and Protagenic Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protagenic Therapeutics 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 Protagenic Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protagenic Therapeutics has no effect on the direction of Connect Biopharma i.e., Connect Biopharma and Protagenic Therapeutics go up and down completely randomly.
Pair Corralation between Connect Biopharma and Protagenic Therapeutics
Given the investment horizon of 90 days Connect Biopharma Holdings is expected to under-perform the Protagenic Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Connect Biopharma Holdings is 2.04 times less risky than Protagenic Therapeutics. The stock trades about -0.06 of its potential returns per unit of risk. The Protagenic Therapeutics is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 66.00 in Protagenic Therapeutics on September 1, 2024 and sell it today you would lose (7.00) from holding Protagenic Therapeutics or give up 10.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Connect Biopharma Holdings vs. Protagenic Therapeutics
Performance |
| Timeline |
| Connect Biopharma |
| Protagenic Therapeutics |
Connect Biopharma and Protagenic Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Connect Biopharma and Protagenic Therapeutics
The main advantage of trading using opposite Connect Biopharma and Protagenic Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Connect Biopharma position performs unexpectedly, Protagenic 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 Protagenic Therapeutics will offset losses from the drop in Protagenic Therapeutics' long position.| Connect Biopharma vs. Assembly Biosciences | Connect Biopharma vs. Instil Bio | Connect Biopharma vs. CytomX Therapeutics | Connect Biopharma vs. Achilles Therapeutics PLC |
| Protagenic Therapeutics vs. Sino Biopharmaceutical Ltd | Protagenic Therapeutics vs. Eledon Pharmaceuticals | Protagenic Therapeutics vs. Rezolute | Protagenic Therapeutics vs. XOMA Corporation |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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