Correlation Between Finch Therapeutics and Applied Therapeutics
Can any of the company-specific risk be diversified away by investing in both Finch Therapeutics and Applied 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 Finch Therapeutics and Applied Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finch Therapeutics Group and Applied Therapeutics, you can compare the effects of market volatilities on Finch Therapeutics and Applied 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 Finch Therapeutics with a short position of Applied Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finch Therapeutics and Applied Therapeutics.
Diversification Opportunities for Finch Therapeutics and Applied Therapeutics
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Finch and Applied is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Finch Therapeutics Group and Applied Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Therapeutics and Finch 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 Finch Therapeutics Group are associated (or correlated) with Applied Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Therapeutics has no effect on the direction of Finch Therapeutics i.e., Finch Therapeutics and Applied Therapeutics go up and down completely randomly.
Pair Corralation between Finch Therapeutics and Applied Therapeutics
If you would invest 335.00 in Applied Therapeutics on August 25, 2024 and sell it today you would earn a total of 628.00 from holding Applied Therapeutics or generate 187.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.44% |
| Values | Daily Returns |
Finch Therapeutics Group vs. Applied Therapeutics
Performance |
| Timeline |
| Finch Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Applied Therapeutics |
Finch Therapeutics and Applied Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finch Therapeutics and Applied Therapeutics
The main advantage of trading using opposite Finch Therapeutics and Applied Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finch Therapeutics position performs unexpectedly, Applied 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 Applied Therapeutics will offset losses from the drop in Applied Therapeutics' long position.| Finch Therapeutics vs. Werewolf Therapeutics | Finch Therapeutics vs. Edgewise Therapeutics | Finch Therapeutics vs. Celcuity LLC | Finch Therapeutics vs. C4 Therapeutics |
| Applied Therapeutics vs. X4 Pharmaceuticals | Applied Therapeutics vs. Terns Pharmaceuticals | Applied Therapeutics vs. Day One Biopharmaceuticals | Applied Therapeutics vs. Hookipa Pharma |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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