Correlation Between ATyr Pharma and Galera Therapeutics
Can any of the company-specific risk be diversified away by investing in both ATyr Pharma and Galera 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 ATyr Pharma and Galera Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATyr Pharma and Galera Therapeutics, you can compare the effects of market volatilities on ATyr Pharma and Galera 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 ATyr Pharma with a short position of Galera Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATyr Pharma and Galera Therapeutics.
Diversification Opportunities for ATyr Pharma and Galera Therapeutics
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ATyr and Galera is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding ATyr Pharma and Galera Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galera Therapeutics and ATyr Pharma 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 ATyr Pharma are associated (or correlated) with Galera Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galera Therapeutics has no effect on the direction of ATyr Pharma i.e., ATyr Pharma and Galera Therapeutics go up and down completely randomly.
Pair Corralation between ATyr Pharma and Galera Therapeutics
Given the investment horizon of 90 days ATyr Pharma is expected to under-perform the Galera Therapeutics. In addition to that, ATyr Pharma is 1.2 times more volatile than Galera Therapeutics. It trades about -0.04 of its total potential returns per unit of risk. Galera Therapeutics is currently generating about 0.08 per unit of volatility. If you would invest 167.00 in Galera Therapeutics on August 26, 2024 and sell it today you would earn a total of 91.00 from holding Galera Therapeutics or generate 54.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 41.73% |
Values | Daily Returns |
ATyr Pharma vs. Galera Therapeutics
Performance |
Timeline |
ATyr Pharma |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Galera Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ATyr Pharma and Galera Therapeutics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ATyr Pharma and Galera Therapeutics
The main advantage of trading using opposite ATyr Pharma and Galera Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATyr Pharma position performs unexpectedly, Galera 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 Galera Therapeutics will offset losses from the drop in Galera Therapeutics' long position.ATyr Pharma vs. Mereo BioPharma Group | ATyr Pharma vs. Terns Pharmaceuticals | ATyr Pharma vs. PDS Biotechnology Corp | ATyr Pharma vs. Inozyme Pharma |
Galera Therapeutics vs. Mereo BioPharma Group | Galera Therapeutics vs. Terns Pharmaceuticals | Galera Therapeutics vs. PDS Biotechnology Corp | Galera Therapeutics vs. Inozyme Pharma |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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