Correlation Between Ikena Oncology and Olema Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Ikena Oncology and Olema Pharmaceuticals 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 Olema Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ikena Oncology and Olema Pharmaceuticals, you can compare the effects of market volatilities on Ikena Oncology and Olema Pharmaceuticals 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 Olema Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ikena Oncology and Olema Pharmaceuticals.
Diversification Opportunities for Ikena Oncology and Olema Pharmaceuticals
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ikena and Olema is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Ikena Oncology and Olema Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olema Pharmaceuticals 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 Olema Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olema Pharmaceuticals has no effect on the direction of Ikena Oncology i.e., Ikena Oncology and Olema Pharmaceuticals go up and down completely randomly.
Pair Corralation between Ikena Oncology and Olema Pharmaceuticals
Given the investment horizon of 90 days Ikena Oncology is expected to generate 0.26 times more return on investment than Olema Pharmaceuticals. However, Ikena Oncology is 3.79 times less risky than Olema Pharmaceuticals. It trades about 0.04 of its potential returns per unit of risk. Olema Pharmaceuticals is currently generating about -0.08 per unit of risk. If you would invest 171.00 in Ikena Oncology on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Ikena Oncology or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ikena Oncology vs. Olema Pharmaceuticals
Performance |
| Timeline |
| Ikena Oncology |
| Olema Pharmaceuticals |
Ikena Oncology and Olema Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ikena Oncology and Olema Pharmaceuticals
The main advantage of trading using opposite Ikena Oncology and Olema Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ikena Oncology position performs unexpectedly, Olema Pharmaceuticals 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 Olema Pharmaceuticals will offset losses from the drop in Olema Pharmaceuticals' long position.| Ikena Oncology vs. Edgewise Therapeutics | Ikena Oncology vs. Design Therapeutics | Ikena Oncology vs. Xilio Development | Ikena Oncology vs. Eliem Therapeutics |
| Olema Pharmaceuticals vs. Sana Biotechnology | Olema Pharmaceuticals vs. Cullinan Oncology LLC | Olema Pharmaceuticals vs. Zentalis Pharmaceuticals Llc | Olema Pharmaceuticals vs. Molecular Partners AG |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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