Correlation Between Prelude Therapeutics and Shattuck Labs
Can any of the company-specific risk be diversified away by investing in both Prelude Therapeutics 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 Prelude Therapeutics and Shattuck Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prelude Therapeutics and Shattuck Labs, you can compare the effects of market volatilities on Prelude Therapeutics 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 Prelude Therapeutics with a short position of Shattuck Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prelude Therapeutics and Shattuck Labs.
Diversification Opportunities for Prelude Therapeutics and Shattuck Labs
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Prelude and Shattuck is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Prelude Therapeutics and Shattuck Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shattuck Labs and Prelude 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 Prelude Therapeutics 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 Prelude Therapeutics i.e., Prelude Therapeutics and Shattuck Labs go up and down completely randomly.
Pair Corralation between Prelude Therapeutics and Shattuck Labs
Given the investment horizon of 90 days Prelude Therapeutics is expected to under-perform the Shattuck Labs. But the stock apears to be less risky and, when comparing its historical volatility, Prelude Therapeutics is 1.21 times less risky than Shattuck Labs. The stock trades about -0.45 of its potential returns per unit of risk. The Shattuck Labs is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest 136.00 in Shattuck Labs on August 28, 2024 and sell it today you would lose (35.00) from holding Shattuck Labs or give up 25.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prelude Therapeutics vs. Shattuck Labs
Performance |
| Timeline |
| Prelude Therapeutics |
| Shattuck Labs |
Prelude Therapeutics and Shattuck Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prelude Therapeutics and Shattuck Labs
The main advantage of trading using opposite Prelude Therapeutics and Shattuck Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prelude Therapeutics 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.| Prelude Therapeutics vs. Foghorn Therapeutics | Prelude Therapeutics vs. Shattuck Labs | Prelude Therapeutics vs. Monte Rosa Therapeutics | Prelude Therapeutics vs. Kymera Therapeutics |
| Shattuck Labs vs. C4 Therapeutics | Shattuck Labs vs. Eliem Therapeutics | Shattuck Labs vs. Prelude Therapeutics | Shattuck Labs vs. Monte Rosa 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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