Correlation Between Hookipa Pharma and Solid Biosciences

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Can any of the company-specific risk be diversified away by investing in both Hookipa Pharma and Solid 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 Hookipa Pharma and Solid Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hookipa Pharma and Solid Biosciences LLC, you can compare the effects of market volatilities on Hookipa Pharma and Solid 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 Hookipa Pharma with a short position of Solid Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hookipa Pharma and Solid Biosciences.

Diversification Opportunities for Hookipa Pharma and Solid Biosciences

0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Hookipa and Solid is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hookipa Pharma and Solid Biosciences LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solid Biosciences LLC and Hookipa Pharma 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 Hookipa Pharma are associated (or correlated) with Solid Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solid Biosciences LLC has no effect on the direction of Hookipa Pharma i.e., Hookipa Pharma and Solid Biosciences go up and down completely randomly.

Pair Corralation between Hookipa Pharma and Solid Biosciences

Given the investment horizon of 90 days Hookipa Pharma is expected to under-perform the Solid Biosciences. In addition to that, Hookipa Pharma is 1.04 times more volatile than Solid Biosciences LLC. It trades about -0.45 of its total potential returns per unit of risk. Solid Biosciences LLC is currently generating about 0.01 per unit of volatility. If you would invest  583.00  in Solid Biosciences LLC on August 29, 2024 and sell it today you would lose (5.00) from holding Solid Biosciences LLC or give up 0.86% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Hookipa Pharma  vs.  Solid Biosciences LLC

 Performance 
       Timeline  
Hookipa Pharma 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Hookipa Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
Solid Biosciences LLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Solid Biosciences LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Hookipa Pharma and Solid Biosciences Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hookipa Pharma and Solid Biosciences

The main advantage of trading using opposite Hookipa Pharma and Solid Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hookipa Pharma position performs unexpectedly, Solid 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 Solid Biosciences will offset losses from the drop in Solid Biosciences' long position.
The idea behind Hookipa Pharma and Solid Biosciences LLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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