Correlation Between NewAmsterdam Pharma and Arcturus Therapeutics
Can any of the company-specific risk be diversified away by investing in both NewAmsterdam Pharma and Arcturus 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 NewAmsterdam Pharma and Arcturus Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NewAmsterdam Pharma and Arcturus Therapeutics Holdings, you can compare the effects of market volatilities on NewAmsterdam Pharma and Arcturus 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 NewAmsterdam Pharma with a short position of Arcturus Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewAmsterdam Pharma and Arcturus Therapeutics.
Diversification Opportunities for NewAmsterdam Pharma and Arcturus Therapeutics
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NewAmsterdam and Arcturus is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding NewAmsterdam Pharma and Arcturus Therapeutics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcturus Therapeutics and NewAmsterdam 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 NewAmsterdam Pharma are associated (or correlated) with Arcturus Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcturus Therapeutics has no effect on the direction of NewAmsterdam Pharma i.e., NewAmsterdam Pharma and Arcturus Therapeutics go up and down completely randomly.
Pair Corralation between NewAmsterdam Pharma and Arcturus Therapeutics
Given the investment horizon of 90 days NewAmsterdam Pharma is expected to generate 1.0 times more return on investment than Arcturus Therapeutics. However, NewAmsterdam Pharma is 1.0 times more volatile than Arcturus Therapeutics Holdings. It trades about 0.12 of its potential returns per unit of risk. Arcturus Therapeutics Holdings is currently generating about 0.04 per unit of risk. If you would invest 1,782 in NewAmsterdam Pharma on September 2, 2024 and sell it today you would earn a total of 203.00 from holding NewAmsterdam Pharma or generate 11.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NewAmsterdam Pharma vs. Arcturus Therapeutics Holdings
Performance |
| Timeline |
| NewAmsterdam Pharma |
| Arcturus Therapeutics |
NewAmsterdam Pharma and Arcturus Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewAmsterdam Pharma and Arcturus Therapeutics
The main advantage of trading using opposite NewAmsterdam Pharma and Arcturus Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewAmsterdam Pharma position performs unexpectedly, Arcturus 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 Arcturus Therapeutics will offset losses from the drop in Arcturus Therapeutics' long position.| NewAmsterdam Pharma vs. Monte Rosa Therapeutics | NewAmsterdam Pharma vs. Inventiva Sa | NewAmsterdam Pharma vs. Cullinan Oncology LLC | NewAmsterdam Pharma vs. Compass Therapeutics |
| Arcturus Therapeutics vs. 89bio Inc | Arcturus Therapeutics vs. Madrigal Pharmaceuticals | Arcturus Therapeutics vs. Pliant Therapeutics | Arcturus Therapeutics vs. Arcellx |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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