Correlation Between Passage Bio and Protagonist Therapeutics
Can any of the company-specific risk be diversified away by investing in both Passage Bio and Protagonist 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 Protagonist 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 Protagonist Therapeutics, you can compare the effects of market volatilities on Passage Bio and Protagonist 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 Protagonist Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Passage Bio and Protagonist Therapeutics.
Diversification Opportunities for Passage Bio and Protagonist Therapeutics
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Passage and Protagonist is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Passage Bio and Protagonist Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protagonist 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 Protagonist Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protagonist Therapeutics has no effect on the direction of Passage Bio i.e., Passage Bio and Protagonist Therapeutics go up and down completely randomly.
Pair Corralation between Passage Bio and Protagonist Therapeutics
Given the investment horizon of 90 days Passage Bio is expected to under-perform the Protagonist Therapeutics. In addition to that, Passage Bio is 1.41 times more volatile than Protagonist Therapeutics. It trades about -0.26 of its total potential returns per unit of risk. Protagonist Therapeutics is currently generating about -0.03 per unit of volatility. If you would invest 3,845 in Protagonist Therapeutics on November 8, 2024 and sell it today you would lose (70.00) from holding Protagonist Therapeutics or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Passage Bio vs. Protagonist Therapeutics
Performance |
| Timeline |
| Passage Bio |
| Protagonist Therapeutics |
Passage Bio and Protagonist Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Passage Bio and Protagonist Therapeutics
The main advantage of trading using opposite Passage Bio and Protagonist Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Passage Bio position performs unexpectedly, Protagonist 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 Protagonist Therapeutics will offset losses from the drop in Protagonist Therapeutics' long position.| Passage Bio vs. Black Diamond Therapeutics | Passage Bio vs. Revolution Medicines | Passage Bio vs. Stoke Therapeutics | Passage Bio vs. Cabaletta Bio |
| Protagonist Therapeutics vs. Revolution Medicines | Protagonist Therapeutics vs. Akero Therapeutics | Protagonist Therapeutics vs. Avidity Biosciences | Protagonist Therapeutics vs. Stoke 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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