Correlation Between PTC Therapeutics and Evolus
Can any of the company-specific risk be diversified away by investing in both PTC Therapeutics and Evolus 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 PTC Therapeutics and Evolus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTC Therapeutics and Evolus Inc, you can compare the effects of market volatilities on PTC Therapeutics and Evolus 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 PTC Therapeutics with a short position of Evolus. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTC Therapeutics and Evolus.
Diversification Opportunities for PTC Therapeutics and Evolus
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PTC and Evolus is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding PTC Therapeutics and Evolus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolus Inc and PTC 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 PTC Therapeutics are associated (or correlated) with Evolus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolus Inc has no effect on the direction of PTC Therapeutics i.e., PTC Therapeutics and Evolus go up and down completely randomly.
Pair Corralation between PTC Therapeutics and Evolus
Given the investment horizon of 90 days PTC Therapeutics is expected to generate 29.76 times less return on investment than Evolus. But when comparing it to its historical volatility, PTC Therapeutics is 3.55 times less risky than Evolus. It trades about 0.02 of its potential returns per unit of risk. Evolus Inc is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,111 in Evolus Inc on November 2, 2024 and sell it today you would earn a total of 310.00 from holding Evolus Inc or generate 27.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTC Therapeutics vs. Evolus Inc
Performance |
| Timeline |
| PTC Therapeutics |
| Evolus Inc |
PTC Therapeutics and Evolus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTC Therapeutics and Evolus
The main advantage of trading using opposite PTC Therapeutics and Evolus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTC Therapeutics position performs unexpectedly, Evolus 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 Evolus will offset losses from the drop in Evolus' long position.| PTC Therapeutics vs. Surrozen | PTC Therapeutics vs. Armata Pharmaceuticals | PTC Therapeutics vs. Pasithea Therapeutics Corp | PTC Therapeutics vs. Aditxt Inc |
| Evolus vs. Collegium Pharmaceutical | Evolus vs. Phibro Animal Health | Evolus vs. ANI Pharmaceuticals | Evolus vs. Procaps Group SA |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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