Correlation Between In8bio and Cognition Therapeutics
Can any of the company-specific risk be diversified away by investing in both In8bio and Cognition 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 In8bio and Cognition Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between In8bio Inc and Cognition Therapeutics, you can compare the effects of market volatilities on In8bio and Cognition 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 In8bio with a short position of Cognition Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of In8bio and Cognition Therapeutics.
Diversification Opportunities for In8bio and Cognition Therapeutics
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between In8bio and Cognition is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding In8bio Inc and Cognition Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognition Therapeutics and In8bio 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 In8bio Inc are associated (or correlated) with Cognition Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognition Therapeutics has no effect on the direction of In8bio i.e., In8bio and Cognition Therapeutics go up and down completely randomly.
Pair Corralation between In8bio and Cognition Therapeutics
Given the investment horizon of 90 days In8bio Inc is expected to generate 1.12 times more return on investment than Cognition Therapeutics. However, In8bio is 1.12 times more volatile than Cognition Therapeutics. It trades about 0.03 of its potential returns per unit of risk. Cognition Therapeutics is currently generating about -0.18 per unit of risk. If you would invest 30.00 in In8bio Inc on August 28, 2024 and sell it today you would earn a total of 0.00 from holding In8bio Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
In8bio Inc vs. Cognition Therapeutics
Performance |
| Timeline |
| In8bio Inc |
| Cognition Therapeutics |
In8bio and Cognition Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with In8bio and Cognition Therapeutics
The main advantage of trading using opposite In8bio and Cognition Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if In8bio position performs unexpectedly, Cognition 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 Cognition Therapeutics will offset losses from the drop in Cognition Therapeutics' long position.| In8bio vs. Reviva Pharmaceuticals Holdings | In8bio vs. Cue Biopharma | In8bio vs. Lantern Pharma | In8bio vs. Anixa Biosciences |
| Cognition Therapeutics vs. Reviva Pharmaceuticals Holdings | Cognition Therapeutics vs. Eyenovia | Cognition Therapeutics vs. Transcode Therapeutics | Cognition Therapeutics vs. Kodiak Sciences |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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