Correlation Between Magenta Therapeutics and Satsuma Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Magenta Therapeutics and Satsuma Pharmaceuticals 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 Magenta Therapeutics and Satsuma Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magenta Therapeutics and Satsuma Pharmaceuticals, you can compare the effects of market volatilities on Magenta Therapeutics and Satsuma Pharmaceuticals 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 Magenta Therapeutics with a short position of Satsuma Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magenta Therapeutics and Satsuma Pharmaceuticals.
Diversification Opportunities for Magenta Therapeutics and Satsuma Pharmaceuticals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Magenta and Satsuma is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Magenta Therapeutics and Satsuma Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satsuma Pharmaceuticals and Magenta Therapeutics 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 Magenta Therapeutics are associated (or correlated) with Satsuma Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satsuma Pharmaceuticals has no effect on the direction of Magenta Therapeutics i.e., Magenta Therapeutics and Satsuma Pharmaceuticals go up and down completely randomly.
Pair Corralation between Magenta Therapeutics and Satsuma Pharmaceuticals
Given the investment horizon of 90 days Magenta Therapeutics is expected to generate 13.08 times less return on investment than Satsuma Pharmaceuticals. In addition to that, Magenta Therapeutics is 1.05 times more volatile than Satsuma Pharmaceuticals. It trades about 0.0 of its total potential returns per unit of risk. Satsuma Pharmaceuticals is currently generating about 0.06 per unit of volatility. If you would invest 86.00 in Satsuma Pharmaceuticals on August 29, 2024 and sell it today you would earn a total of 24.00 from holding Satsuma Pharmaceuticals or generate 27.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 80.13% |
| Values | Daily Returns |
Magenta Therapeutics vs. Satsuma Pharmaceuticals
Performance |
| Timeline |
| Magenta Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Satsuma Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Magenta Therapeutics and Satsuma Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magenta Therapeutics and Satsuma Pharmaceuticals
The main advantage of trading using opposite Magenta Therapeutics and Satsuma Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magenta Therapeutics position performs unexpectedly, Satsuma Pharmaceuticals 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 Satsuma Pharmaceuticals will offset losses from the drop in Satsuma Pharmaceuticals' long position.| Magenta Therapeutics vs. Assembly Biosciences | Magenta Therapeutics vs. Instil Bio | Magenta Therapeutics vs. Nuvation Bio | Magenta Therapeutics vs. Achilles Therapeutics PLC |
| Satsuma Pharmaceuticals vs. Erasca Inc | Satsuma Pharmaceuticals vs. Forte Biosciences | Satsuma Pharmaceuticals vs. SAB Biotherapeutics | Satsuma Pharmaceuticals vs. Senti Biosciences |
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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