Correlation Between NewAmsterdam Pharma and In8bio
Can any of the company-specific risk be diversified away by investing in both NewAmsterdam Pharma and In8bio 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 In8bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NewAmsterdam Pharma and In8bio Inc, you can compare the effects of market volatilities on NewAmsterdam Pharma and In8bio 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 In8bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewAmsterdam Pharma and In8bio.
Diversification Opportunities for NewAmsterdam Pharma and In8bio
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NewAmsterdam and In8bio is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding NewAmsterdam Pharma and In8bio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on In8bio Inc 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 In8bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of In8bio Inc has no effect on the direction of NewAmsterdam Pharma i.e., NewAmsterdam Pharma and In8bio go up and down completely randomly.
Pair Corralation between NewAmsterdam Pharma and In8bio
Assuming the 90 days horizon NewAmsterdam Pharma is expected to generate 1.56 times more return on investment than In8bio. However, NewAmsterdam Pharma is 1.56 times more volatile than In8bio Inc. It trades about 0.07 of its potential returns per unit of risk. In8bio Inc is currently generating about 0.08 per unit of risk. If you would invest 870.00 in NewAmsterdam Pharma on September 1, 2024 and sell it today you would earn a total of 36.00 from holding NewAmsterdam Pharma or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NewAmsterdam Pharma vs. In8bio Inc
Performance |
| Timeline |
| NewAmsterdam Pharma |
| In8bio Inc |
NewAmsterdam Pharma and In8bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewAmsterdam Pharma and In8bio
The main advantage of trading using opposite NewAmsterdam Pharma and In8bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewAmsterdam Pharma position performs unexpectedly, In8bio 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 In8bio will offset losses from the drop in In8bio's long position.| NewAmsterdam Pharma vs. NewAmsterdam Pharma | NewAmsterdam Pharma vs. Scilex Holding | NewAmsterdam Pharma vs. OmniAb Inc |
| In8bio vs. Tff Pharmaceuticals | In8bio vs. Eliem Therapeutics | In8bio vs. Inhibrx | In8bio vs. Enliven 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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