Correlation Between Lyell Immunopharma and Stoke Therapeutics
Can any of the company-specific risk be diversified away by investing in both Lyell Immunopharma and Stoke 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 Lyell Immunopharma and Stoke Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyell Immunopharma and Stoke Therapeutics, you can compare the effects of market volatilities on Lyell Immunopharma and Stoke 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 Lyell Immunopharma with a short position of Stoke Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyell Immunopharma and Stoke Therapeutics.
Diversification Opportunities for Lyell Immunopharma and Stoke Therapeutics
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyell and Stoke is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lyell Immunopharma and Stoke Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stoke Therapeutics and Lyell Immunopharma 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 Lyell Immunopharma are associated (or correlated) with Stoke Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stoke Therapeutics has no effect on the direction of Lyell Immunopharma i.e., Lyell Immunopharma and Stoke Therapeutics go up and down completely randomly.
Pair Corralation between Lyell Immunopharma and Stoke Therapeutics
Given the investment horizon of 90 days Lyell Immunopharma is expected to under-perform the Stoke Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Lyell Immunopharma is 1.34 times less risky than Stoke Therapeutics. The stock trades about -0.12 of its potential returns per unit of risk. The Stoke Therapeutics is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,127 in Stoke Therapeutics on November 2, 2024 and sell it today you would lose (28.00) from holding Stoke Therapeutics or give up 2.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyell Immunopharma vs. Stoke Therapeutics
Performance |
| Timeline |
| Lyell Immunopharma |
| Stoke Therapeutics |
Lyell Immunopharma and Stoke Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyell Immunopharma and Stoke Therapeutics
The main advantage of trading using opposite Lyell Immunopharma and Stoke Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyell Immunopharma position performs unexpectedly, Stoke 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 Stoke Therapeutics will offset losses from the drop in Stoke Therapeutics' long position.| Lyell Immunopharma vs. Cullinan Oncology LLC | Lyell Immunopharma vs. Monte Rosa Therapeutics | Lyell Immunopharma vs. Revolution Medicines | Lyell Immunopharma vs. Nkarta Inc |
| Stoke Therapeutics vs. Surrozen | Stoke Therapeutics vs. Armata Pharmaceuticals | Stoke Therapeutics vs. Pasithea Therapeutics Corp | Stoke Therapeutics vs. Aditxt 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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