Correlation Between Gossamer Bio and NewAmsterdam Pharma
Can any of the company-specific risk be diversified away by investing in both Gossamer Bio and NewAmsterdam Pharma 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 Gossamer Bio and NewAmsterdam Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gossamer Bio and NewAmsterdam Pharma, you can compare the effects of market volatilities on Gossamer Bio and NewAmsterdam Pharma 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 Gossamer Bio with a short position of NewAmsterdam Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gossamer Bio and NewAmsterdam Pharma.
Diversification Opportunities for Gossamer Bio and NewAmsterdam Pharma
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gossamer and NewAmsterdam is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Gossamer Bio and NewAmsterdam Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewAmsterdam Pharma and Gossamer Bio 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 Gossamer Bio are associated (or correlated) with NewAmsterdam Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewAmsterdam Pharma has no effect on the direction of Gossamer Bio i.e., Gossamer Bio and NewAmsterdam Pharma go up and down completely randomly.
Pair Corralation between Gossamer Bio and NewAmsterdam Pharma
Given the investment horizon of 90 days Gossamer Bio is expected to under-perform the NewAmsterdam Pharma. But the stock apears to be less risky and, when comparing its historical volatility, Gossamer Bio is 2.17 times less risky than NewAmsterdam Pharma. The stock trades about -0.48 of its potential returns per unit of risk. The NewAmsterdam Pharma is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,913 in NewAmsterdam Pharma on August 28, 2024 and sell it today you would earn a total of 192.00 from holding NewAmsterdam Pharma or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gossamer Bio vs. NewAmsterdam Pharma
Performance |
| Timeline |
| Gossamer Bio |
| NewAmsterdam Pharma |
Gossamer Bio and NewAmsterdam Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gossamer Bio and NewAmsterdam Pharma
The main advantage of trading using opposite Gossamer Bio and NewAmsterdam Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gossamer Bio position performs unexpectedly, NewAmsterdam Pharma 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 NewAmsterdam Pharma will offset losses from the drop in NewAmsterdam Pharma's long position.| Gossamer Bio vs. Biomea Fusion | Gossamer Bio vs. Stoke Therapeutics | Gossamer Bio vs. Akero Therapeutics | Gossamer Bio vs. Replimune Group |
| NewAmsterdam Pharma vs. Monte Rosa Therapeutics | NewAmsterdam Pharma vs. Inventiva Sa | NewAmsterdam Pharma vs. Cullinan Oncology LLC | NewAmsterdam Pharma vs. Compass 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |