Correlation Between Ikena Oncology and 89bio
Can any of the company-specific risk be diversified away by investing in both Ikena Oncology and 89bio 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 Ikena Oncology and 89bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ikena Oncology and 89bio Inc, you can compare the effects of market volatilities on Ikena Oncology and 89bio 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 Ikena Oncology with a short position of 89bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ikena Oncology and 89bio.
Diversification Opportunities for Ikena Oncology and 89bio
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ikena and 89bio is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ikena Oncology and 89bio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 89bio Inc and Ikena Oncology 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 Ikena Oncology are associated (or correlated) with 89bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 89bio Inc has no effect on the direction of Ikena Oncology i.e., Ikena Oncology and 89bio go up and down completely randomly.
Pair Corralation between Ikena Oncology and 89bio
Given the investment horizon of 90 days Ikena Oncology is expected to generate 1.27 times less return on investment than 89bio. In addition to that, Ikena Oncology is 1.24 times more volatile than 89bio Inc. It trades about 0.02 of its total potential returns per unit of risk. 89bio Inc is currently generating about 0.03 per unit of volatility. If you would invest 847.00 in 89bio Inc on August 30, 2024 and sell it today you would earn a total of 67.00 from holding 89bio Inc or generate 7.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ikena Oncology vs. 89bio Inc
Performance |
| Timeline |
| Ikena Oncology |
| 89bio Inc |
Ikena Oncology and 89bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ikena Oncology and 89bio
The main advantage of trading using opposite Ikena Oncology and 89bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ikena Oncology position performs unexpectedly, 89bio 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 89bio will offset losses from the drop in 89bio's long position.| Ikena Oncology vs. Edgewise Therapeutics | Ikena Oncology vs. Design Therapeutics | Ikena Oncology vs. Xilio Development | Ikena Oncology vs. Eliem 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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