Correlation Between Enliven Therapeutics and Mustang Bio
Can any of the company-specific risk be diversified away by investing in both Enliven Therapeutics and Mustang 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 Enliven Therapeutics and Mustang Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enliven Therapeutics and Mustang Bio, you can compare the effects of market volatilities on Enliven Therapeutics and Mustang 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 Enliven Therapeutics with a short position of Mustang Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enliven Therapeutics and Mustang Bio.
Diversification Opportunities for Enliven Therapeutics and Mustang Bio
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Enliven and Mustang is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Enliven Therapeutics and Mustang Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mustang Bio and Enliven 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 Enliven Therapeutics are associated (or correlated) with Mustang Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mustang Bio has no effect on the direction of Enliven Therapeutics i.e., Enliven Therapeutics and Mustang Bio go up and down completely randomly.
Pair Corralation between Enliven Therapeutics and Mustang Bio
Given the investment horizon of 90 days Enliven Therapeutics is expected to generate 5.61 times less return on investment than Mustang Bio. But when comparing it to its historical volatility, Enliven Therapeutics is 9.32 times less risky than Mustang Bio. It trades about 0.06 of its potential returns per unit of risk. Mustang Bio is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 70.00 in Mustang Bio on September 3, 2024 and sell it today you would lose (50.00) from holding Mustang Bio or give up 71.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enliven Therapeutics vs. Mustang Bio
Performance |
| Timeline |
| Enliven Therapeutics |
| Mustang Bio |
Enliven Therapeutics and Mustang Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enliven Therapeutics and Mustang Bio
The main advantage of trading using opposite Enliven Therapeutics and Mustang Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enliven Therapeutics position performs unexpectedly, Mustang 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 Mustang Bio will offset losses from the drop in Mustang Bio's long position.| Enliven Therapeutics vs. DiaMedica Therapeutics | Enliven Therapeutics vs. Lyra Therapeutics | Enliven Therapeutics vs. Centessa Pharmaceuticals PLC |
| Mustang Bio vs. Checkpoint Therapeutics | Mustang Bio vs. Reviva Pharmaceuticals Holdings | Mustang Bio vs. Fortress Biotech Pref | Mustang Bio vs. Kodiak Sciences |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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