Correlation Between Hepion Pharmaceuticals and BioXcel Therapeutics
Can any of the company-specific risk be diversified away by investing in both Hepion Pharmaceuticals and BioXcel 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 Hepion Pharmaceuticals and BioXcel Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hepion Pharmaceuticals and BioXcel Therapeutics, you can compare the effects of market volatilities on Hepion Pharmaceuticals and BioXcel 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 Hepion Pharmaceuticals with a short position of BioXcel Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hepion Pharmaceuticals and BioXcel Therapeutics.
Diversification Opportunities for Hepion Pharmaceuticals and BioXcel Therapeutics
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hepion and BioXcel is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hepion Pharmaceuticals and BioXcel Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioXcel Therapeutics and Hepion Pharmaceuticals 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 Hepion Pharmaceuticals are associated (or correlated) with BioXcel Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioXcel Therapeutics has no effect on the direction of Hepion Pharmaceuticals i.e., Hepion Pharmaceuticals and BioXcel Therapeutics go up and down completely randomly.
Pair Corralation between Hepion Pharmaceuticals and BioXcel Therapeutics
Given the investment horizon of 90 days Hepion Pharmaceuticals is expected to generate 0.93 times more return on investment than BioXcel Therapeutics. However, Hepion Pharmaceuticals is 1.08 times less risky than BioXcel Therapeutics. It trades about -0.06 of its potential returns per unit of risk. BioXcel Therapeutics is currently generating about -0.17 per unit of risk. If you would invest 116.00 in Hepion Pharmaceuticals on August 31, 2024 and sell it today you would lose (49.00) from holding Hepion Pharmaceuticals or give up 42.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hepion Pharmaceuticals vs. BioXcel Therapeutics
Performance |
| Timeline |
| Hepion Pharmaceuticals |
| BioXcel Therapeutics |
Hepion Pharmaceuticals and BioXcel Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hepion Pharmaceuticals and BioXcel Therapeutics
The main advantage of trading using opposite Hepion Pharmaceuticals and BioXcel Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hepion Pharmaceuticals position performs unexpectedly, BioXcel 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 BioXcel Therapeutics will offset losses from the drop in BioXcel Therapeutics' long position.| Hepion Pharmaceuticals vs. Cue Biopharma | Hepion Pharmaceuticals vs. Eliem Therapeutics | Hepion Pharmaceuticals vs. Inhibrx | Hepion Pharmaceuticals vs. Molecular Partners AG |
| BioXcel Therapeutics vs. Terns Pharmaceuticals | BioXcel Therapeutics vs. Amylyx Pharmaceuticals | BioXcel Therapeutics vs. Acumen Pharmaceuticals | BioXcel Therapeutics vs. Inozyme 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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