Correlation Between Pliant Therapeutics and Stoke Therapeutics
Can any of the company-specific risk be diversified away by investing in both Pliant Therapeutics 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 Pliant Therapeutics and Stoke Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pliant Therapeutics and Stoke Therapeutics, you can compare the effects of market volatilities on Pliant Therapeutics 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 Pliant Therapeutics with a short position of Stoke Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pliant Therapeutics and Stoke Therapeutics.
Diversification Opportunities for Pliant Therapeutics and Stoke Therapeutics
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Pliant and Stoke is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Pliant Therapeutics and Stoke Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stoke Therapeutics and Pliant Therapeutics 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 Pliant Therapeutics 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 Pliant Therapeutics i.e., Pliant Therapeutics and Stoke Therapeutics go up and down completely randomly.
Pair Corralation between Pliant Therapeutics and Stoke Therapeutics
Given the investment horizon of 90 days Pliant Therapeutics is expected to under-perform the Stoke Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Pliant Therapeutics is 1.18 times less risky than Stoke Therapeutics. The stock trades about -0.14 of its potential returns per unit of risk. The Stoke Therapeutics is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,231 in Stoke Therapeutics on August 28, 2024 and sell it today you would lose (53.00) from holding Stoke Therapeutics or give up 4.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pliant Therapeutics vs. Stoke Therapeutics
Performance |
| Timeline |
| Pliant Therapeutics |
| Stoke Therapeutics |
Pliant Therapeutics and Stoke Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pliant Therapeutics and Stoke Therapeutics
The main advantage of trading using opposite Pliant Therapeutics and Stoke Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pliant Therapeutics 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.| Pliant Therapeutics vs. Eliem Therapeutics | Pliant Therapeutics vs. HCW Biologics | Pliant Therapeutics vs. Scpharmaceuticals | Pliant Therapeutics vs. Milestone Pharmaceuticals |
| Stoke Therapeutics vs. Adaptimmune Therapeutics Plc | Stoke Therapeutics vs. Black Diamond Therapeutics | Stoke Therapeutics vs. Relay Therapeutics | Stoke Therapeutics vs. Pliant 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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