Correlation Between 4D Molecular and Stoke Therapeutics
Can any of the company-specific risk be diversified away by investing in both 4D Molecular and Stoke 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 4D Molecular and Stoke Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 4D Molecular Therapeutics and Stoke Therapeutics, you can compare the effects of market volatilities on 4D Molecular and Stoke 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 4D Molecular with a short position of Stoke Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of 4D Molecular and Stoke Therapeutics.
Diversification Opportunities for 4D Molecular and Stoke Therapeutics
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FDMT and Stoke is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding 4D Molecular Therapeutics and Stoke Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stoke Therapeutics and 4D Molecular 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 4D Molecular Therapeutics are associated (or correlated) with Stoke Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stoke Therapeutics has no effect on the direction of 4D Molecular i.e., 4D Molecular and Stoke Therapeutics go up and down completely randomly.
Pair Corralation between 4D Molecular and Stoke Therapeutics
Given the investment horizon of 90 days 4D Molecular Therapeutics is expected to under-perform the Stoke Therapeutics. In addition to that, 4D Molecular is 1.03 times more volatile than Stoke Therapeutics. It trades about -0.01 of its total potential returns per unit of risk. Stoke Therapeutics is currently generating about 0.04 per unit of volatility. If you would invest 872.00 in Stoke Therapeutics on November 9, 2024 and sell it today you would earn a total of 402.00 from holding Stoke Therapeutics or generate 46.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
4D Molecular Therapeutics vs. Stoke Therapeutics
Performance |
| Timeline |
| 4D Molecular Therapeutics |
| Stoke Therapeutics |
4D Molecular and Stoke Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 4D Molecular and Stoke Therapeutics
The main advantage of trading using opposite 4D Molecular and Stoke Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 4D Molecular position performs unexpectedly, Stoke 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 Stoke Therapeutics will offset losses from the drop in Stoke Therapeutics' long position.| 4D Molecular vs. Revolution Medicines | 4D Molecular vs. Black Diamond Therapeutics | 4D Molecular vs. Passage Bio | 4D Molecular vs. Century Therapeutics |
| Stoke Therapeutics vs. Adaptimmune Therapeutics Plc | Stoke Therapeutics vs. Black Diamond Therapeutics | Stoke Therapeutics vs. Relay Therapeutics | Stoke Therapeutics vs. Pliant Therapeutics |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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