Correlation Between Histogen and Puma Biotechnology
Can any of the company-specific risk be diversified away by investing in both Histogen and Puma Biotechnology 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 Histogen and Puma Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Histogen and Puma Biotechnology, you can compare the effects of market volatilities on Histogen and Puma Biotechnology 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 Histogen with a short position of Puma Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Histogen and Puma Biotechnology.
Diversification Opportunities for Histogen and Puma Biotechnology
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Histogen and Puma is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Histogen and Puma Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puma Biotechnology and Histogen 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 Histogen are associated (or correlated) with Puma Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puma Biotechnology has no effect on the direction of Histogen i.e., Histogen and Puma Biotechnology go up and down completely randomly.
Pair Corralation between Histogen and Puma Biotechnology
Given the investment horizon of 90 days Histogen is expected to under-perform the Puma Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, Histogen is 1.1 times less risky than Puma Biotechnology. The stock trades about -0.58 of its potential returns per unit of risk. The Puma Biotechnology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 281.00 in Puma Biotechnology on October 22, 2024 and sell it today you would earn a total of 16.00 from holding Puma Biotechnology or generate 5.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 15.79% |
| Values | Daily Returns |
Histogen vs. Puma Biotechnology
Performance |
| Timeline |
| Histogen |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Puma Biotechnology |
Histogen and Puma Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Histogen and Puma Biotechnology
The main advantage of trading using opposite Histogen and Puma Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Histogen position performs unexpectedly, Puma Biotechnology 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 Puma Biotechnology will offset losses from the drop in Puma Biotechnology's long position.| Histogen vs. Virax Biolabs Group | Histogen vs. Artelo Biosciences | Histogen vs. Curis Inc | Histogen vs. SAB Biotherapeutics |
| Puma Biotechnology vs. Ultragenyx | Puma Biotechnology vs. Crinetics Pharmaceuticals | Puma Biotechnology vs. Arvinas | Puma Biotechnology vs. Revolution Medicines |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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