Correlation Between HCW Biologics and Fortress Biotech
Can any of the company-specific risk be diversified away by investing in both HCW Biologics and Fortress Biotech 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 HCW Biologics and Fortress Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HCW Biologics and Fortress Biotech, you can compare the effects of market volatilities on HCW Biologics and Fortress Biotech 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 HCW Biologics with a short position of Fortress Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCW Biologics and Fortress Biotech.
Diversification Opportunities for HCW Biologics and Fortress Biotech
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HCW and Fortress is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding HCW Biologics and Fortress Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortress Biotech and HCW Biologics 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 HCW Biologics are associated (or correlated) with Fortress Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortress Biotech has no effect on the direction of HCW Biologics i.e., HCW Biologics and Fortress Biotech go up and down completely randomly.
Pair Corralation between HCW Biologics and Fortress Biotech
Given the investment horizon of 90 days HCW Biologics is expected to generate 15.86 times more return on investment than Fortress Biotech. However, HCW Biologics is 15.86 times more volatile than Fortress Biotech. It trades about 0.14 of its potential returns per unit of risk. Fortress Biotech is currently generating about -0.07 per unit of risk. If you would invest 45.00 in HCW Biologics on August 29, 2024 and sell it today you would earn a total of 11.00 from holding HCW Biologics or generate 24.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HCW Biologics vs. Fortress Biotech
Performance |
| Timeline |
| HCW Biologics |
| Fortress Biotech |
HCW Biologics and Fortress Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HCW Biologics and Fortress Biotech
The main advantage of trading using opposite HCW Biologics and Fortress Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCW Biologics position performs unexpectedly, Fortress Biotech 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 Fortress Biotech will offset losses from the drop in Fortress Biotech's long position.| HCW Biologics vs. Eliem Therapeutics | HCW Biologics vs. Scpharmaceuticals | HCW Biologics vs. Milestone Pharmaceuticals | HCW Biologics vs. Seres Therapeutics |
| Fortress Biotech vs. Mustang Bio | Fortress Biotech vs. Achilles Therapeutics PLC | Fortress Biotech vs. Aptose Biosciences | Fortress Biotech vs. Fortress Biotech Pref |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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