Correlation Between Durect and Sage Therapeutic
Can any of the company-specific risk be diversified away by investing in both Durect and Sage Therapeutic 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 Durect and Sage Therapeutic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Durect and Sage Therapeutic, you can compare the effects of market volatilities on Durect and Sage Therapeutic 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 Durect with a short position of Sage Therapeutic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Durect and Sage Therapeutic.
Diversification Opportunities for Durect and Sage Therapeutic
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Durect and Sage is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Durect and Sage Therapeutic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sage Therapeutic and Durect 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 Durect are associated (or correlated) with Sage Therapeutic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sage Therapeutic has no effect on the direction of Durect i.e., Durect and Sage Therapeutic go up and down completely randomly.
Pair Corralation between Durect and Sage Therapeutic
Given the investment horizon of 90 days Durect is expected to generate 1.51 times more return on investment than Sage Therapeutic. However, Durect is 1.51 times more volatile than Sage Therapeutic. It trades about 0.0 of its potential returns per unit of risk. Sage Therapeutic is currently generating about -0.06 per unit of risk. If you would invest 401.00 in Durect on September 4, 2024 and sell it today you would lose (309.00) from holding Durect or give up 77.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Durect vs. Sage Therapeutic
Performance |
| Timeline |
| Durect |
| Sage Therapeutic |
Durect and Sage Therapeutic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Durect and Sage Therapeutic
The main advantage of trading using opposite Durect and Sage Therapeutic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Durect position performs unexpectedly, Sage Therapeutic 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 Sage Therapeutic will offset losses from the drop in Sage Therapeutic's long position.| Durect vs. Shuttle Pharmaceuticals | Durect vs. Organogenesis Holdings | Durect vs. Alpha Teknova | Durect vs. Sonoma Pharmaceuticals |
| Sage Therapeutic vs. Apellis Pharmaceuticals | Sage Therapeutic vs. Terns Pharmaceuticals | Sage Therapeutic vs. Day One Biopharmaceuticals | Sage Therapeutic vs. Blueprint Medicines Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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