Correlation Between I Mab and Akero Therapeutics
Can any of the company-specific risk be diversified away by investing in both I Mab and Akero 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 I Mab and Akero Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between I Mab and Akero Therapeutics, you can compare the effects of market volatilities on I Mab and Akero 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 I Mab with a short position of Akero Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Mab and Akero Therapeutics.
Diversification Opportunities for I Mab and Akero Therapeutics
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between IMAB and Akero is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding I Mab and Akero Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akero Therapeutics and I Mab 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 I Mab are associated (or correlated) with Akero Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akero Therapeutics has no effect on the direction of I Mab i.e., I Mab and Akero Therapeutics go up and down completely randomly.
Pair Corralation between I Mab and Akero Therapeutics
Given the investment horizon of 90 days I Mab is expected to under-perform the Akero Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, I Mab is 1.45 times less risky than Akero Therapeutics. The stock trades about -0.39 of its potential returns per unit of risk. The Akero Therapeutics is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,971 in Akero Therapeutics on August 28, 2024 and sell it today you would earn a total of 206.00 from holding Akero Therapeutics or generate 6.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
I Mab vs. Akero Therapeutics
Performance |
| Timeline |
| I Mab |
| Akero Therapeutics |
I Mab and Akero Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I Mab and Akero Therapeutics
The main advantage of trading using opposite I Mab and Akero Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Mab position performs unexpectedly, Akero 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 Akero Therapeutics will offset losses from the drop in Akero Therapeutics' long position.The idea behind I Mab and Akero Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Akero Therapeutics vs. Eliem Therapeutics | Akero Therapeutics vs. HCW Biologics | Akero Therapeutics vs. Scpharmaceuticals | Akero Therapeutics vs. Milestone Pharmaceuticals |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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