Correlation Between Homology Medicines and Harmony Biosciences
Can any of the company-specific risk be diversified away by investing in both Homology Medicines and Harmony Biosciences 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 Homology Medicines and Harmony Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Homology Medicines and Harmony Biosciences Holdings, you can compare the effects of market volatilities on Homology Medicines and Harmony Biosciences 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 Homology Medicines with a short position of Harmony Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homology Medicines and Harmony Biosciences.
Diversification Opportunities for Homology Medicines and Harmony Biosciences
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Homology and Harmony is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Homology Medicines and Harmony Biosciences Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Biosciences and Homology Medicines 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 Homology Medicines are associated (or correlated) with Harmony Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Biosciences has no effect on the direction of Homology Medicines i.e., Homology Medicines and Harmony Biosciences go up and down completely randomly.
Pair Corralation between Homology Medicines and Harmony Biosciences
If you would invest 3,575 in Harmony Biosciences Holdings on August 27, 2024 and sell it today you would lose (104.00) from holding Harmony Biosciences Holdings or give up 2.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Homology Medicines vs. Harmony Biosciences Holdings
Performance |
| Timeline |
| Homology Medicines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Harmony Biosciences |
Homology Medicines and Harmony Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Homology Medicines and Harmony Biosciences
The main advantage of trading using opposite Homology Medicines and Harmony Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homology Medicines position performs unexpectedly, Harmony Biosciences 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 Harmony Biosciences will offset losses from the drop in Harmony Biosciences' long position.| Homology Medicines vs. Passage Bio | Homology Medicines vs. Stoke Therapeutics | Homology Medicines vs. Adaptimmune Therapeutics Plc | Homology Medicines vs. Black Diamond Therapeutics |
| Harmony Biosciences vs. Keros Therapeutics | Harmony Biosciences vs. Janux Therapeutics | Harmony Biosciences vs. Fennec Pharmaceuticals | Harmony Biosciences vs. Edgewise 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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