Correlation Between Equillium and SpringWorks Therapeutics
Can any of the company-specific risk be diversified away by investing in both Equillium and SpringWorks Therapeutics 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 SpringWorks Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equillium and SpringWorks Therapeutics, you can compare the effects of market volatilities on Equillium and SpringWorks Therapeutics 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 SpringWorks Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equillium and SpringWorks Therapeutics.
Diversification Opportunities for Equillium and SpringWorks Therapeutics
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Equillium and SpringWorks is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Equillium and SpringWorks Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpringWorks Therapeutics 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 SpringWorks Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpringWorks Therapeutics has no effect on the direction of Equillium i.e., Equillium and SpringWorks Therapeutics go up and down completely randomly.
Pair Corralation between Equillium and SpringWorks Therapeutics
Allowing for the 90-day total investment horizon Equillium is expected to generate 2.05 times more return on investment than SpringWorks Therapeutics. However, Equillium is 2.05 times more volatile than SpringWorks Therapeutics. It trades about 0.03 of its potential returns per unit of risk. SpringWorks Therapeutics is currently generating about 0.05 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equillium vs. SpringWorks Therapeutics
Performance |
| Timeline |
| Equillium |
| SpringWorks Therapeutics |
Equillium and SpringWorks Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equillium and SpringWorks Therapeutics
The main advantage of trading using opposite Equillium and SpringWorks Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equillium position performs unexpectedly, SpringWorks Therapeutics 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 SpringWorks Therapeutics will offset losses from the drop in SpringWorks Therapeutics' long position.| Equillium vs. Lyra Therapeutics | Equillium vs. Hookipa Pharma | Equillium vs. Jasper Therapeutics | Equillium vs. Cingulate Warrants |
| SpringWorks Therapeutics vs. Equillium | SpringWorks Therapeutics vs. DiaMedica Therapeutics | SpringWorks Therapeutics vs. Valneva SE ADR | SpringWorks Therapeutics 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 CEOs Directory module to screen CEOs from public companies around the world.
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