Correlation Between NewAmsterdam Pharma and Curative Biotechnology
Can any of the company-specific risk be diversified away by investing in both NewAmsterdam Pharma and Curative Biotechnology 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 Curative Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NewAmsterdam Pharma and Curative Biotechnology, you can compare the effects of market volatilities on NewAmsterdam Pharma and Curative Biotechnology 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 Curative Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewAmsterdam Pharma and Curative Biotechnology.
Diversification Opportunities for NewAmsterdam Pharma and Curative Biotechnology
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NewAmsterdam and Curative is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding NewAmsterdam Pharma and Curative Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curative Biotechnology 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 Curative Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curative Biotechnology has no effect on the direction of NewAmsterdam Pharma i.e., NewAmsterdam Pharma and Curative Biotechnology go up and down completely randomly.
Pair Corralation between NewAmsterdam Pharma and Curative Biotechnology
Given the investment horizon of 90 days NewAmsterdam Pharma is expected to generate 32.0 times less return on investment than Curative Biotechnology. But when comparing it to its historical volatility, NewAmsterdam Pharma is 35.62 times less risky than Curative Biotechnology. It trades about 0.13 of its potential returns per unit of risk. Curative Biotechnology is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1.34 in Curative Biotechnology on August 28, 2024 and sell it today you would lose (0.47) from holding Curative Biotechnology or give up 35.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.83% |
| Values | Daily Returns |
NewAmsterdam Pharma vs. Curative Biotechnology
Performance |
| Timeline |
| NewAmsterdam Pharma |
| Curative Biotechnology |
NewAmsterdam Pharma and Curative Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewAmsterdam Pharma and Curative Biotechnology
The main advantage of trading using opposite NewAmsterdam Pharma and Curative Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewAmsterdam Pharma position performs unexpectedly, Curative Biotechnology 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 Curative Biotechnology will offset losses from the drop in Curative Biotechnology's long position.| NewAmsterdam Pharma vs. Monte Rosa Therapeutics | NewAmsterdam Pharma vs. Inventiva Sa | NewAmsterdam Pharma vs. Cullinan Oncology LLC | NewAmsterdam Pharma vs. Compass Therapeutics |
| Curative Biotechnology vs. Biotron Limited | Curative Biotechnology vs. biOasis Technologies | Curative Biotechnology vs. Covalon Technologies | Curative Biotechnology vs. Mosaic Immunoengineering |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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