Correlation Between Edgewise Therapeutics and Cutera
Can any of the company-specific risk be diversified away by investing in both Edgewise Therapeutics and Cutera 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 Edgewise Therapeutics and Cutera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edgewise Therapeutics and Cutera Inc, you can compare the effects of market volatilities on Edgewise Therapeutics and Cutera 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 Edgewise Therapeutics with a short position of Cutera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewise Therapeutics and Cutera.
Diversification Opportunities for Edgewise Therapeutics and Cutera
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Edgewise and Cutera is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Edgewise Therapeutics and Cutera Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cutera Inc and Edgewise 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 Edgewise Therapeutics are associated (or correlated) with Cutera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cutera Inc has no effect on the direction of Edgewise Therapeutics i.e., Edgewise Therapeutics and Cutera go up and down completely randomly.
Pair Corralation between Edgewise Therapeutics and Cutera
Given the investment horizon of 90 days Edgewise Therapeutics is expected to generate 0.87 times more return on investment than Cutera. However, Edgewise Therapeutics is 1.15 times less risky than Cutera. It trades about 0.11 of its potential returns per unit of risk. Cutera Inc is currently generating about -0.13 per unit of risk. If you would invest 1,741 in Edgewise Therapeutics on August 31, 2024 and sell it today you would earn a total of 1,559 from holding Edgewise Therapeutics or generate 89.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edgewise Therapeutics vs. Cutera Inc
Performance |
| Timeline |
| Edgewise Therapeutics |
| Cutera Inc |
Edgewise Therapeutics and Cutera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edgewise Therapeutics and Cutera
The main advantage of trading using opposite Edgewise Therapeutics and Cutera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewise Therapeutics position performs unexpectedly, Cutera 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 Cutera will offset losses from the drop in Cutera's long position.| Edgewise Therapeutics vs. Cue Biopharma | Edgewise Therapeutics vs. Eliem Therapeutics | Edgewise Therapeutics vs. Inhibrx | Edgewise Therapeutics 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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