Correlation Between Equillium and Sutro Biopharma
Can any of the company-specific risk be diversified away by investing in both Equillium and Sutro Biopharma 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 Sutro Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equillium and Sutro Biopharma, you can compare the effects of market volatilities on Equillium and Sutro Biopharma 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 Sutro Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equillium and Sutro Biopharma.
Diversification Opportunities for Equillium and Sutro Biopharma
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Equillium and Sutro is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Equillium and Sutro Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sutro Biopharma 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 Sutro Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sutro Biopharma has no effect on the direction of Equillium i.e., Equillium and Sutro Biopharma go up and down completely randomly.
Pair Corralation between Equillium and Sutro Biopharma
Allowing for the 90-day total investment horizon Equillium is expected to generate 1.29 times more return on investment than Sutro Biopharma. However, Equillium is 1.29 times more volatile than Sutro Biopharma. It trades about 0.03 of its potential returns per unit of risk. Sutro Biopharma is currently generating about -0.01 per unit of risk. If you would invest 84.00 in Equillium on September 12, 2024 and sell it today you would lose (14.00) from holding Equillium or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equillium vs. Sutro Biopharma
Performance |
| Timeline |
| Equillium |
| Sutro Biopharma |
Equillium and Sutro Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equillium and Sutro Biopharma
The main advantage of trading using opposite Equillium and Sutro Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equillium position performs unexpectedly, Sutro Biopharma 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 Sutro Biopharma will offset losses from the drop in Sutro Biopharma's long position.| Equillium vs. Lyra Therapeutics | Equillium vs. Hookipa Pharma | Equillium vs. Jasper Therapeutics | Equillium vs. Cingulate Warrants |
| Sutro Biopharma vs. Equillium | Sutro Biopharma vs. DiaMedica Therapeutics | Sutro Biopharma vs. Valneva SE ADR | Sutro Biopharma vs. Vivani Medical |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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