Correlation Between Eterna Therapeutics and Silence Therapeutics
Can any of the company-specific risk be diversified away by investing in both Eterna Therapeutics and Silence 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 Eterna Therapeutics and Silence Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eterna Therapeutics and Silence Therapeutics PLC, you can compare the effects of market volatilities on Eterna Therapeutics and Silence 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 Eterna Therapeutics with a short position of Silence Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eterna Therapeutics and Silence Therapeutics.
Diversification Opportunities for Eterna Therapeutics and Silence Therapeutics
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eterna and Silence is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Eterna Therapeutics and Silence Therapeutics PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silence Therapeutics PLC and Eterna 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 Eterna Therapeutics are associated (or correlated) with Silence Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silence Therapeutics PLC has no effect on the direction of Eterna Therapeutics i.e., Eterna Therapeutics and Silence Therapeutics go up and down completely randomly.
Pair Corralation between Eterna Therapeutics and Silence Therapeutics
Given the investment horizon of 90 days Eterna Therapeutics is expected to under-perform the Silence Therapeutics. In addition to that, Eterna Therapeutics is 1.15 times more volatile than Silence Therapeutics PLC. It trades about -0.05 of its total potential returns per unit of risk. Silence Therapeutics PLC is currently generating about -0.01 per unit of volatility. If you would invest 1,540 in Silence Therapeutics PLC on September 12, 2024 and sell it today you would lose (857.00) from holding Silence Therapeutics PLC or give up 55.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eterna Therapeutics vs. Silence Therapeutics PLC
Performance |
| Timeline |
| Eterna Therapeutics |
| Silence Therapeutics PLC |
Eterna Therapeutics and Silence Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eterna Therapeutics and Silence Therapeutics
The main advantage of trading using opposite Eterna Therapeutics and Silence Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eterna Therapeutics position performs unexpectedly, Silence 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 Silence Therapeutics will offset losses from the drop in Silence Therapeutics' long position.| Eterna Therapeutics vs. Equillium | Eterna Therapeutics vs. DiaMedica Therapeutics | Eterna Therapeutics vs. Valneva SE ADR | Eterna Therapeutics vs. Vivani Medical |
| Silence Therapeutics vs. Cidara Therapeutics | Silence Therapeutics vs. Applied Therapeutics | Silence Therapeutics vs. CytomX Therapeutics | Silence Therapeutics vs. Shattuck Labs |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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