Correlation Between Design Therapeutics and Aeglea Bio
Can any of the company-specific risk be diversified away by investing in both Design Therapeutics and Aeglea Bio 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 Design Therapeutics and Aeglea Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Design Therapeutics and Aeglea Bio Therapeutics, you can compare the effects of market volatilities on Design Therapeutics and Aeglea Bio 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 Design Therapeutics with a short position of Aeglea Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Design Therapeutics and Aeglea Bio.
Diversification Opportunities for Design Therapeutics and Aeglea Bio
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Design and Aeglea is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Design Therapeutics and Aeglea Bio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeglea Bio Therapeutics and Design Therapeutics 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 Design Therapeutics are associated (or correlated) with Aeglea Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeglea Bio Therapeutics has no effect on the direction of Design Therapeutics i.e., Design Therapeutics and Aeglea Bio go up and down completely randomly.
Pair Corralation between Design Therapeutics and Aeglea Bio
If you would invest 407.00 in Design Therapeutics on August 30, 2024 and sell it today you would earn a total of 190.00 from holding Design Therapeutics or generate 46.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Design Therapeutics vs. Aeglea Bio Therapeutics
Performance |
| Timeline |
| Design Therapeutics |
| Aeglea Bio Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Design Therapeutics and Aeglea Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Design Therapeutics and Aeglea Bio
The main advantage of trading using opposite Design Therapeutics and Aeglea Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Design Therapeutics position performs unexpectedly, Aeglea Bio 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 Aeglea Bio will offset losses from the drop in Aeglea Bio's long position.| Design Therapeutics vs. Monte Rosa Therapeutics | Design Therapeutics vs. Werewolf Therapeutics | Design Therapeutics vs. Ikena Oncology | Design Therapeutics vs. Stoke Therapeutics |
| Aeglea Bio vs. Edgewise Therapeutics | Aeglea Bio vs. Ikena Oncology | Aeglea Bio vs. Design Therapeutics | Aeglea Bio vs. Xilio Development |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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