Correlation Between Oncolytics Biotech and Stoke Therapeutics

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Can any of the company-specific risk be diversified away by investing in both Oncolytics Biotech and Stoke 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 Oncolytics Biotech and Stoke Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oncolytics Biotech and Stoke Therapeutics, you can compare the effects of market volatilities on Oncolytics Biotech and Stoke 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 Oncolytics Biotech with a short position of Stoke Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oncolytics Biotech and Stoke Therapeutics.

Diversification Opportunities for Oncolytics Biotech and Stoke Therapeutics

-0.25
  Correlation Coefficient

Very good diversification

The 3 months correlation between Oncolytics and Stoke is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Oncolytics Biotech and Stoke Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stoke Therapeutics and Oncolytics Biotech 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 Oncolytics Biotech are associated (or correlated) with Stoke Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stoke Therapeutics has no effect on the direction of Oncolytics Biotech i.e., Oncolytics Biotech and Stoke Therapeutics go up and down completely randomly.

Pair Corralation between Oncolytics Biotech and Stoke Therapeutics

Given the investment horizon of 90 days Oncolytics Biotech is expected to generate 1.52 times more return on investment than Stoke Therapeutics. However, Oncolytics Biotech is 1.52 times more volatile than Stoke Therapeutics. It trades about -0.01 of its potential returns per unit of risk. Stoke Therapeutics is currently generating about -0.1 per unit of risk. If you would invest  99.00  in Oncolytics Biotech on September 5, 2024 and sell it today you would lose (11.00) from holding Oncolytics Biotech or give up 11.11% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Oncolytics Biotech  vs.  Stoke Therapeutics

 Performance 
       Timeline  
Oncolytics Biotech 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Oncolytics Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Oncolytics Biotech is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Stoke Therapeutics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Stoke Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Oncolytics Biotech and Stoke Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Oncolytics Biotech and Stoke Therapeutics

The main advantage of trading using opposite Oncolytics Biotech and Stoke Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oncolytics Biotech position performs unexpectedly, Stoke 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 Stoke Therapeutics will offset losses from the drop in Stoke Therapeutics' long position.
The idea behind Oncolytics Biotech and Stoke Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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