Correlation Between NewAmsterdam Pharma and Sutro Biopharma
Can any of the company-specific risk be diversified away by investing in both NewAmsterdam Pharma and Sutro Biopharma 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 Sutro Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NewAmsterdam Pharma and Sutro Biopharma, you can compare the effects of market volatilities on NewAmsterdam Pharma and Sutro Biopharma 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 Sutro Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewAmsterdam Pharma and Sutro Biopharma.
Diversification Opportunities for NewAmsterdam Pharma and Sutro Biopharma
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NewAmsterdam and Sutro is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding NewAmsterdam Pharma and Sutro Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sutro Biopharma 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 Sutro Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sutro Biopharma has no effect on the direction of NewAmsterdam Pharma i.e., NewAmsterdam Pharma and Sutro Biopharma go up and down completely randomly.
Pair Corralation between NewAmsterdam Pharma and Sutro Biopharma
Given the investment horizon of 90 days NewAmsterdam Pharma is expected to generate 0.89 times more return on investment than Sutro Biopharma. However, NewAmsterdam Pharma is 1.13 times less risky than Sutro Biopharma. It trades about 0.11 of its potential returns per unit of risk. Sutro Biopharma is currently generating about -0.2 per unit of risk. If you would invest 1,913 in NewAmsterdam Pharma on August 28, 2024 and sell it today you would earn a total of 192.00 from holding NewAmsterdam Pharma or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NewAmsterdam Pharma vs. Sutro Biopharma
Performance |
| Timeline |
| NewAmsterdam Pharma |
| Sutro Biopharma |
NewAmsterdam Pharma and Sutro Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewAmsterdam Pharma and Sutro Biopharma
The main advantage of trading using opposite NewAmsterdam Pharma and Sutro Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewAmsterdam Pharma position performs unexpectedly, Sutro Biopharma 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 Sutro Biopharma will offset losses from the drop in Sutro Biopharma'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 |
| Sutro Biopharma vs. Vaxcyte | Sutro Biopharma vs. Larimar Therapeutics | Sutro Biopharma vs. Syndax Pharmaceuticals | Sutro Biopharma vs. Merus BV |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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