Correlation Between Passage Bio and Shattuck Labs
Can any of the company-specific risk be diversified away by investing in both Passage Bio and Shattuck Labs 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 Shattuck Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Passage Bio and Shattuck Labs, you can compare the effects of market volatilities on Passage Bio and Shattuck Labs 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 Shattuck Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Passage Bio and Shattuck Labs.
Diversification Opportunities for Passage Bio and Shattuck Labs
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Passage and Shattuck is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Passage Bio and Shattuck Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shattuck Labs 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 Shattuck Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shattuck Labs has no effect on the direction of Passage Bio i.e., Passage Bio and Shattuck Labs go up and down completely randomly.
Pair Corralation between Passage Bio and Shattuck Labs
Given the investment horizon of 90 days Passage Bio is expected to under-perform the Shattuck Labs. But the stock apears to be less risky and, when comparing its historical volatility, Passage Bio is 1.44 times less risky than Shattuck Labs. The stock trades about 0.0 of its potential returns per unit of risk. The Shattuck Labs is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 300.00 in Shattuck Labs on January 17, 2025 and sell it today you would lose (223.44) from holding Shattuck Labs or give up 74.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Passage Bio vs. Shattuck Labs
Performance |
| Timeline |
| Passage Bio |
| Shattuck Labs |
Passage Bio and Shattuck Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Passage Bio and Shattuck Labs
The main advantage of trading using opposite Passage Bio and Shattuck Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Passage Bio position performs unexpectedly, Shattuck Labs 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 Shattuck Labs will offset losses from the drop in Shattuck Labs' long position.| Passage Bio vs. Black Diamond Therapeutics | Passage Bio vs. Revolution Medicines | Passage Bio vs. Stoke Therapeutics | Passage Bio vs. Cabaletta Bio |
| Shattuck Labs vs. C4 Therapeutics | Shattuck Labs vs. Prelude Therapeutics | Shattuck Labs vs. Monte Rosa Therapeutics | Shattuck Labs vs. Foghorn 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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