Correlation Between MAIA Biotechnology and Scholar Rock
Can any of the company-specific risk be diversified away by investing in both MAIA Biotechnology and Scholar Rock 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 MAIA Biotechnology and Scholar Rock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAIA Biotechnology and Scholar Rock Holding, you can compare the effects of market volatilities on MAIA Biotechnology and Scholar Rock 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 MAIA Biotechnology with a short position of Scholar Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAIA Biotechnology and Scholar Rock.
Diversification Opportunities for MAIA Biotechnology and Scholar Rock
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MAIA and Scholar is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding MAIA Biotechnology and Scholar Rock Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scholar Rock Holding and MAIA Biotechnology 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 MAIA Biotechnology are associated (or correlated) with Scholar Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scholar Rock Holding has no effect on the direction of MAIA Biotechnology i.e., MAIA Biotechnology and Scholar Rock go up and down completely randomly.
Pair Corralation between MAIA Biotechnology and Scholar Rock
Given the investment horizon of 90 days MAIA Biotechnology is expected to under-perform the Scholar Rock. In addition to that, MAIA Biotechnology is 1.12 times more volatile than Scholar Rock Holding. It trades about -0.05 of its total potential returns per unit of risk. Scholar Rock Holding is currently generating about 0.16 per unit of volatility. If you would invest 2,991 in Scholar Rock Holding on October 25, 2024 and sell it today you would earn a total of 1,516 from holding Scholar Rock Holding or generate 50.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAIA Biotechnology vs. Scholar Rock Holding
Performance |
| Timeline |
| MAIA Biotechnology |
| Scholar Rock Holding |
MAIA Biotechnology and Scholar Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAIA Biotechnology and Scholar Rock
The main advantage of trading using opposite MAIA Biotechnology and Scholar Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAIA Biotechnology position performs unexpectedly, Scholar Rock 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 Scholar Rock will offset losses from the drop in Scholar Rock's long position.| MAIA Biotechnology vs. Lineage Cell Therapeutics | MAIA Biotechnology vs. Armata Pharmaceuticals | MAIA Biotechnology vs. Portage Biotech | MAIA Biotechnology vs. Larimar Therapeutics |
| Scholar Rock vs. Revolution Medicines | Scholar Rock vs. Black Diamond Therapeutics | Scholar Rock vs. Passage Bio | Scholar Rock vs. Monte Rosa Therapeutics |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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