Correlation Between NYSE Composite and Satsuma Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Satsuma Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Satsuma Pharmaceuticals, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Satsuma Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Satsuma Pharmaceuticals.
Diversification Opportunities for NYSE Composite and Satsuma Pharmaceuticals
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Satsuma is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Satsuma Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satsuma Pharmaceuticals and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Satsuma Pharmaceuticals go up and down completely randomly.
Pair Corralation between NYSE Composite and Satsuma Pharmaceuticals
Assuming the 90 days trading horizon NYSE Composite is expected to generate 6.51 times less return on investment than Satsuma Pharmaceuticals. But when comparing it to its historical volatility, NYSE Composite is 9.49 times less risky than Satsuma Pharmaceuticals. It trades about 0.08 of its potential returns per unit of risk. Satsuma Pharmaceuticals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 89.00 in Satsuma Pharmaceuticals on August 25, 2024 and sell it today you would earn a total of 21.00 from holding Satsuma Pharmaceuticals or generate 23.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 25.75% |
| Values | Daily Returns |
NYSE Composite vs. Satsuma Pharmaceuticals
Performance |
| Timeline |
NYSE Composite and Satsuma Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Satsuma Pharmaceuticals
Pair trading matchups for Satsuma Pharmaceuticals
Pair Trading with NYSE Composite and Satsuma Pharmaceuticals
The main advantage of trading using opposite NYSE Composite and Satsuma Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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