Correlation Between Design Therapeutics and SIGA Technologies
Can any of the company-specific risk be diversified away by investing in both Design Therapeutics and SIGA Technologies 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 SIGA Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Design Therapeutics and SIGA Technologies, you can compare the effects of market volatilities on Design Therapeutics and SIGA Technologies 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 SIGA Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Design Therapeutics and SIGA Technologies.
Diversification Opportunities for Design Therapeutics and SIGA Technologies
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Design and SIGA is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Design Therapeutics and SIGA Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIGA Technologies 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 SIGA Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIGA Technologies has no effect on the direction of Design Therapeutics i.e., Design Therapeutics and SIGA Technologies go up and down completely randomly.
Pair Corralation between Design Therapeutics and SIGA Technologies
Given the investment horizon of 90 days Design Therapeutics is expected to generate 1.0 times less return on investment than SIGA Technologies. In addition to that, Design Therapeutics is 1.44 times more volatile than SIGA Technologies. It trades about 0.04 of its total potential returns per unit of risk. SIGA Technologies is currently generating about 0.06 per unit of volatility. If you would invest 702.00 in SIGA Technologies on August 28, 2024 and sell it today you would earn a total of 29.00 from holding SIGA Technologies or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Design Therapeutics vs. SIGA Technologies
Performance |
| Timeline |
| Design Therapeutics |
| SIGA Technologies |
Design Therapeutics and SIGA Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Design Therapeutics and SIGA Technologies
The main advantage of trading using opposite Design Therapeutics and SIGA Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Design Therapeutics position performs unexpectedly, SIGA Technologies 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 SIGA Technologies will offset losses from the drop in SIGA Technologies' long position.| Design Therapeutics vs. Monte Rosa Therapeutics | Design Therapeutics vs. Werewolf Therapeutics | Design Therapeutics vs. Ikena Oncology | Design Therapeutics vs. Stoke Therapeutics |
| SIGA Technologies vs. Elanco Animal Health | SIGA Technologies vs. Esperion Therapeutics | SIGA Technologies vs. Catalent | SIGA Technologies vs. China Pharma Holdings |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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