Correlation Between In8bio and NewAmsterdam Pharma
Can any of the company-specific risk be diversified away by investing in both In8bio 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 In8bio and NewAmsterdam Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between In8bio Inc and NewAmsterdam Pharma, you can compare the effects of market volatilities on In8bio 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 In8bio with a short position of NewAmsterdam Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of In8bio and NewAmsterdam Pharma.
Diversification Opportunities for In8bio and NewAmsterdam Pharma
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between In8bio and NewAmsterdam is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding In8bio Inc and NewAmsterdam Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewAmsterdam Pharma 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 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 In8bio i.e., In8bio and NewAmsterdam Pharma go up and down completely randomly.
Pair Corralation between In8bio and NewAmsterdam Pharma
Given the investment horizon of 90 days In8bio is expected to generate 1.39 times less return on investment than NewAmsterdam Pharma. But when comparing it to its historical volatility, In8bio Inc is 1.56 times less risky than NewAmsterdam Pharma. It trades about 0.08 of its potential returns per unit of risk. NewAmsterdam Pharma is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 870.00 in NewAmsterdam Pharma on September 1, 2024 and sell it today you would earn a total of 36.00 from holding NewAmsterdam Pharma or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
In8bio Inc vs. NewAmsterdam Pharma
Performance |
| Timeline |
| In8bio Inc |
| NewAmsterdam Pharma |
In8bio and NewAmsterdam Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with In8bio and NewAmsterdam Pharma
The main advantage of trading using opposite In8bio and NewAmsterdam Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if In8bio 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.| In8bio vs. Tff Pharmaceuticals | In8bio vs. Eliem Therapeutics | In8bio vs. Inhibrx | In8bio vs. Enliven Therapeutics |
| NewAmsterdam Pharma vs. NewAmsterdam Pharma | NewAmsterdam Pharma vs. Scilex Holding | NewAmsterdam Pharma vs. OmniAb Inc |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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