Correlation Between Crinetics Pharmaceuticals and Summit Therapeutics
Can any of the company-specific risk be diversified away by investing in both Crinetics Pharmaceuticals and Summit 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 Crinetics Pharmaceuticals and Summit Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crinetics Pharmaceuticals and Summit Therapeutics PLC, you can compare the effects of market volatilities on Crinetics Pharmaceuticals and Summit 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 Crinetics Pharmaceuticals with a short position of Summit Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crinetics Pharmaceuticals and Summit Therapeutics.
Diversification Opportunities for Crinetics Pharmaceuticals and Summit Therapeutics
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Crinetics and Summit is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Crinetics Pharmaceuticals and Summit Therapeutics PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Therapeutics PLC and Crinetics 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 Crinetics Pharmaceuticals are associated (or correlated) with Summit Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Therapeutics PLC has no effect on the direction of Crinetics Pharmaceuticals i.e., Crinetics Pharmaceuticals and Summit Therapeutics go up and down completely randomly.
Pair Corralation between Crinetics Pharmaceuticals and Summit Therapeutics
Given the investment horizon of 90 days Crinetics Pharmaceuticals is expected to generate 18.97 times less return on investment than Summit Therapeutics. But when comparing it to its historical volatility, Crinetics Pharmaceuticals is 5.76 times less risky than Summit Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Summit Therapeutics PLC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 425.00 in Summit Therapeutics PLC on November 3, 2024 and sell it today you would earn a total of 1,725 from holding Summit Therapeutics PLC or generate 405.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crinetics Pharmaceuticals vs. Summit Therapeutics PLC
Performance |
| Timeline |
| Crinetics Pharmaceuticals |
| Summit Therapeutics PLC |
Crinetics Pharmaceuticals and Summit Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crinetics Pharmaceuticals and Summit Therapeutics
The main advantage of trading using opposite Crinetics Pharmaceuticals and Summit Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crinetics Pharmaceuticals position performs unexpectedly, Summit 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 Summit Therapeutics will offset losses from the drop in Summit Therapeutics' long position.| Crinetics Pharmaceuticals vs. Viridian Therapeutics | Crinetics Pharmaceuticals vs. Cytokinetics | Crinetics Pharmaceuticals vs. Structure Therapeutics American | Crinetics Pharmaceuticals vs. Passage Bio |
| Summit Therapeutics vs. Nkarta Inc | Summit Therapeutics vs. Cullinan Oncology LLC | Summit Therapeutics vs. Kezar Life Sciences | Summit Therapeutics vs. Kronos Bio |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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