Correlation Between Ikena Oncology and Tempest Therapeutics
Can any of the company-specific risk be diversified away by investing in both Ikena Oncology and Tempest 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 Ikena Oncology and Tempest Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ikena Oncology and Tempest Therapeutics, you can compare the effects of market volatilities on Ikena Oncology and Tempest 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 Ikena Oncology with a short position of Tempest Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ikena Oncology and Tempest Therapeutics.
Diversification Opportunities for Ikena Oncology and Tempest Therapeutics
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ikena and Tempest is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ikena Oncology and Tempest Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tempest Therapeutics 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 Tempest Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tempest Therapeutics has no effect on the direction of Ikena Oncology i.e., Ikena Oncology and Tempest Therapeutics go up and down completely randomly.
Pair Corralation between Ikena Oncology and Tempest Therapeutics
Given the investment horizon of 90 days Ikena Oncology is expected to generate 3.46 times less return on investment than Tempest Therapeutics. But when comparing it to its historical volatility, Ikena Oncology is 2.6 times less risky than Tempest Therapeutics. It trades about 0.04 of its potential returns per unit of risk. Tempest Therapeutics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 92.00 in Tempest Therapeutics on September 1, 2024 and sell it today you would earn a total of 3.00 from holding Tempest Therapeutics or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ikena Oncology vs. Tempest Therapeutics
Performance |
| Timeline |
| Ikena Oncology |
| Tempest Therapeutics |
Ikena Oncology and Tempest Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ikena Oncology and Tempest Therapeutics
The main advantage of trading using opposite Ikena Oncology and Tempest Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ikena Oncology position performs unexpectedly, Tempest 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 Tempest Therapeutics will offset losses from the drop in Tempest Therapeutics' long position.| Ikena Oncology vs. Edgewise Therapeutics | Ikena Oncology vs. Design Therapeutics | Ikena Oncology vs. Xilio Development | Ikena Oncology vs. Eliem Therapeutics |
| Tempest Therapeutics vs. Indaptus Therapeutics | Tempest Therapeutics vs. Rezolute | Tempest Therapeutics vs. Forte Biosciences | Tempest Therapeutics vs. Sana Biotechnology |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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