Correlation Between Champions Oncology and Werewolf Therapeutics
Can any of the company-specific risk be diversified away by investing in both Champions Oncology and Werewolf 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 Champions Oncology and Werewolf Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champions Oncology and Werewolf Therapeutics, you can compare the effects of market volatilities on Champions Oncology and Werewolf 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 Champions Oncology with a short position of Werewolf Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champions Oncology and Werewolf Therapeutics.
Diversification Opportunities for Champions Oncology and Werewolf Therapeutics
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Champions and Werewolf is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Champions Oncology and Werewolf Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Werewolf Therapeutics and Champions Oncology 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 Champions Oncology are associated (or correlated) with Werewolf Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Werewolf Therapeutics has no effect on the direction of Champions Oncology i.e., Champions Oncology and Werewolf Therapeutics go up and down completely randomly.
Pair Corralation between Champions Oncology and Werewolf Therapeutics
Given the investment horizon of 90 days Champions Oncology is expected to generate 0.69 times more return on investment than Werewolf Therapeutics. However, Champions Oncology is 1.44 times less risky than Werewolf Therapeutics. It trades about 0.18 of its potential returns per unit of risk. Werewolf Therapeutics is currently generating about -0.26 per unit of risk. If you would invest 379.00 in Champions Oncology on August 31, 2024 and sell it today you would earn a total of 52.00 from holding Champions Oncology or generate 13.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champions Oncology vs. Werewolf Therapeutics
Performance |
| Timeline |
| Champions Oncology |
| Werewolf Therapeutics |
Champions Oncology and Werewolf Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champions Oncology and Werewolf Therapeutics
The main advantage of trading using opposite Champions Oncology and Werewolf Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champions Oncology position performs unexpectedly, Werewolf 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 Werewolf Therapeutics will offset losses from the drop in Werewolf Therapeutics' long position.| Champions Oncology vs. Molecular Partners AG | Champions Oncology vs. MediciNova | Champions Oncology vs. Anebulo Pharmaceuticals | Champions Oncology vs. Shattuck Labs |
| Werewolf Therapeutics vs. Monte Rosa Therapeutics | Werewolf Therapeutics vs. Design Therapeutics | Werewolf Therapeutics vs. Ikena Oncology | Werewolf Therapeutics vs. Stoke 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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