Correlation Between Passage Bio and Amicus Therapeutics
Can any of the company-specific risk be diversified away by investing in both Passage Bio and Amicus 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 Passage Bio and Amicus Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Passage Bio and Amicus Therapeutics, you can compare the effects of market volatilities on Passage Bio and Amicus 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 Passage Bio with a short position of Amicus Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Passage Bio and Amicus Therapeutics.
Diversification Opportunities for Passage Bio and Amicus Therapeutics
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Passage and Amicus is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Passage Bio and Amicus Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amicus Therapeutics and Passage Bio 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 Passage Bio are associated (or correlated) with Amicus Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amicus Therapeutics has no effect on the direction of Passage Bio i.e., Passage Bio and Amicus Therapeutics go up and down completely randomly.
Pair Corralation between Passage Bio and Amicus Therapeutics
Given the investment horizon of 90 days Passage Bio is expected to generate 3.29 times more return on investment than Amicus Therapeutics. However, Passage Bio is 3.29 times more volatile than Amicus Therapeutics. It trades about -0.01 of its potential returns per unit of risk. Amicus Therapeutics is currently generating about -0.06 per unit of risk. If you would invest 147.00 in Passage Bio on October 22, 2024 and sell it today you would lose (87.00) from holding Passage Bio or give up 59.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Passage Bio vs. Amicus Therapeutics
Performance |
| Timeline |
| Passage Bio |
| Amicus Therapeutics |
Passage Bio and Amicus Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Passage Bio and Amicus Therapeutics
The main advantage of trading using opposite Passage Bio and Amicus Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Passage Bio position performs unexpectedly, Amicus 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 Amicus Therapeutics will offset losses from the drop in Amicus Therapeutics' long position.| Passage Bio vs. Black Diamond Therapeutics | Passage Bio vs. Revolution Medicines | Passage Bio vs. Stoke Therapeutics | Passage Bio vs. Cabaletta Bio |
| Amicus Therapeutics vs. Incyte | Amicus Therapeutics vs. Denali Therapeutics | Amicus Therapeutics vs. argenx NV ADR | Amicus Therapeutics vs. Harmony Biosciences Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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