Correlation Between Ikena Oncology and Gilead Sciences
Can any of the company-specific risk be diversified away by investing in both Ikena Oncology and Gilead Sciences 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 Gilead Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ikena Oncology and Gilead Sciences, you can compare the effects of market volatilities on Ikena Oncology and Gilead Sciences 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 Gilead Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ikena Oncology and Gilead Sciences.
Diversification Opportunities for Ikena Oncology and Gilead Sciences
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ikena and Gilead is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ikena Oncology and Gilead Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gilead Sciences 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 Gilead Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gilead Sciences has no effect on the direction of Ikena Oncology i.e., Ikena Oncology and Gilead Sciences go up and down completely randomly.
Pair Corralation between Ikena Oncology and Gilead Sciences
Given the investment horizon of 90 days Ikena Oncology is expected to under-perform the Gilead Sciences. But the stock apears to be less risky and, when comparing its historical volatility, Ikena Oncology is 1.05 times less risky than Gilead Sciences. The stock trades about -0.19 of its potential returns per unit of risk. The Gilead Sciences is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 9,535 in Gilead Sciences on November 28, 2024 and sell it today you would earn a total of 1,511 from holding Gilead Sciences or generate 15.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ikena Oncology vs. Gilead Sciences
Performance |
| Timeline |
| Ikena Oncology |
| Gilead Sciences |
Ikena Oncology and Gilead Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ikena Oncology and Gilead Sciences
The main advantage of trading using opposite Ikena Oncology and Gilead Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ikena Oncology position performs unexpectedly, Gilead Sciences 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 Gilead Sciences will offset losses from the drop in Gilead Sciences' long position.| Ikena Oncology vs. Edgewise Therapeutics | Ikena Oncology vs. Design Therapeutics | Ikena Oncology vs. Xilio Development | Ikena Oncology vs. Monte Rosa Therapeutics |
| Gilead Sciences vs. Amgen Inc | Gilead Sciences vs. Merck Company | Gilead Sciences vs. AbbVie Inc | Gilead Sciences vs. Johnson Johnson |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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