Correlation Between IGM Biosciences and Stoke Therapeutics
Can any of the company-specific risk be diversified away by investing in both IGM Biosciences and Stoke 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 IGM Biosciences and Stoke Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGM Biosciences and Stoke Therapeutics, you can compare the effects of market volatilities on IGM Biosciences and Stoke 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 IGM Biosciences with a short position of Stoke Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGM Biosciences and Stoke Therapeutics.
Diversification Opportunities for IGM Biosciences and Stoke Therapeutics
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between IGM and Stoke is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding IGM Biosciences and Stoke Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stoke Therapeutics and IGM Biosciences 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 IGM Biosciences are associated (or correlated) with Stoke Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stoke Therapeutics has no effect on the direction of IGM Biosciences i.e., IGM Biosciences and Stoke Therapeutics go up and down completely randomly.
Pair Corralation between IGM Biosciences and Stoke Therapeutics
Given the investment horizon of 90 days IGM Biosciences is expected to under-perform the Stoke Therapeutics. In addition to that, IGM Biosciences is 1.32 times more volatile than Stoke Therapeutics. It trades about -0.59 of its total potential returns per unit of risk. Stoke Therapeutics is currently generating about -0.04 per unit of volatility. If you would invest 1,231 in Stoke Therapeutics on August 28, 2024 and sell it today you would lose (53.00) from holding Stoke Therapeutics or give up 4.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IGM Biosciences vs. Stoke Therapeutics
Performance |
| Timeline |
| IGM Biosciences |
| Stoke Therapeutics |
IGM Biosciences and Stoke Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGM Biosciences and Stoke Therapeutics
The main advantage of trading using opposite IGM Biosciences and Stoke Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGM Biosciences position performs unexpectedly, Stoke 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 Stoke Therapeutics will offset losses from the drop in Stoke Therapeutics' long position.| IGM Biosciences vs. Eliem Therapeutics | IGM Biosciences vs. HCW Biologics | IGM Biosciences vs. Scpharmaceuticals | IGM Biosciences vs. Milestone Pharmaceuticals |
| Stoke Therapeutics vs. Adaptimmune Therapeutics Plc | Stoke Therapeutics vs. Black Diamond Therapeutics | Stoke Therapeutics vs. Relay Therapeutics | Stoke Therapeutics vs. Pliant 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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