Correlation Between Ikena Oncology and NewAmsterdam Pharma
Can any of the company-specific risk be diversified away by investing in both Ikena Oncology and NewAmsterdam Pharma 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 NewAmsterdam Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ikena Oncology and NewAmsterdam Pharma, you can compare the effects of market volatilities on Ikena Oncology and NewAmsterdam Pharma 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 NewAmsterdam Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ikena Oncology and NewAmsterdam Pharma.
Diversification Opportunities for Ikena Oncology and NewAmsterdam Pharma
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ikena and NewAmsterdam is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ikena Oncology and NewAmsterdam Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewAmsterdam Pharma 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 NewAmsterdam Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewAmsterdam Pharma has no effect on the direction of Ikena Oncology i.e., Ikena Oncology and NewAmsterdam Pharma go up and down completely randomly.
Pair Corralation between Ikena Oncology and NewAmsterdam Pharma
Given the investment horizon of 90 days Ikena Oncology is expected to under-perform the NewAmsterdam Pharma. But the stock apears to be less risky and, when comparing its historical volatility, Ikena Oncology is 7.34 times less risky than NewAmsterdam Pharma. The stock trades about -0.03 of its potential returns per unit of risk. The NewAmsterdam Pharma is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 890.00 in NewAmsterdam Pharma on August 30, 2024 and sell it today you would earn a total of 79.00 from holding NewAmsterdam Pharma or generate 8.88% 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. NewAmsterdam Pharma
Performance |
| Timeline |
| Ikena Oncology |
| NewAmsterdam Pharma |
Ikena Oncology and NewAmsterdam Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ikena Oncology and NewAmsterdam Pharma
The main advantage of trading using opposite Ikena Oncology and NewAmsterdam Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ikena Oncology position performs unexpectedly, NewAmsterdam Pharma 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 NewAmsterdam Pharma will offset losses from the drop in NewAmsterdam Pharma's long position.| Ikena Oncology vs. Edgewise Therapeutics | Ikena Oncology vs. Design Therapeutics | Ikena Oncology vs. Xilio Development | Ikena Oncology vs. Eliem Therapeutics |
| NewAmsterdam Pharma vs. Ikena Oncology | NewAmsterdam Pharma vs. Eliem Therapeutics | NewAmsterdam Pharma vs. HCW Biologics | NewAmsterdam Pharma vs. RenovoRx |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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