Correlation Between Equillium and Petros Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Equillium and Petros Pharmaceuticals 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 Equillium and Petros Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equillium and Petros Pharmaceuticals, you can compare the effects of market volatilities on Equillium and Petros Pharmaceuticals 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 Equillium with a short position of Petros Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equillium and Petros Pharmaceuticals.
Diversification Opportunities for Equillium and Petros Pharmaceuticals
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Equillium and Petros is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Equillium and Petros Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petros Pharmaceuticals and Equillium 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 Equillium are associated (or correlated) with Petros Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petros Pharmaceuticals has no effect on the direction of Equillium i.e., Equillium and Petros Pharmaceuticals go up and down completely randomly.
Pair Corralation between Equillium and Petros Pharmaceuticals
Allowing for the 90-day total investment horizon Equillium is expected to generate 0.9 times more return on investment than Petros Pharmaceuticals. However, Equillium is 1.11 times less risky than Petros Pharmaceuticals. It trades about 0.04 of its potential returns per unit of risk. Petros Pharmaceuticals is currently generating about -0.04 per unit of risk. If you would invest 64.00 in Equillium on August 31, 2024 and sell it today you would earn a total of 11.00 from holding Equillium or generate 17.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equillium vs. Petros Pharmaceuticals
Performance |
| Timeline |
| Equillium |
| Petros Pharmaceuticals |
Equillium and Petros Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equillium and Petros Pharmaceuticals
The main advantage of trading using opposite Equillium and Petros Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equillium position performs unexpectedly, Petros Pharmaceuticals 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 Petros Pharmaceuticals will offset losses from the drop in Petros Pharmaceuticals' long position.| Equillium vs. Cue Biopharma | Equillium vs. Eliem Therapeutics | Equillium vs. Inhibrx | Equillium vs. Molecular Partners AG |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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