Correlation Between Protagonist Therapeutics and Akero Therapeutics
Can any of the company-specific risk be diversified away by investing in both Protagonist Therapeutics and Akero 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 Protagonist Therapeutics and Akero Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Protagonist Therapeutics and Akero Therapeutics, you can compare the effects of market volatilities on Protagonist Therapeutics and Akero 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 Protagonist Therapeutics with a short position of Akero Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Protagonist Therapeutics and Akero Therapeutics.
Diversification Opportunities for Protagonist Therapeutics and Akero Therapeutics
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Protagonist and Akero is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Protagonist Therapeutics and Akero Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akero Therapeutics and Protagonist 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 Protagonist Therapeutics are associated (or correlated) with Akero Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akero Therapeutics has no effect on the direction of Protagonist Therapeutics i.e., Protagonist Therapeutics and Akero Therapeutics go up and down completely randomly.
Pair Corralation between Protagonist Therapeutics and Akero Therapeutics
Given the investment horizon of 90 days Protagonist Therapeutics is expected to generate 0.89 times more return on investment than Akero Therapeutics. However, Protagonist Therapeutics is 1.12 times less risky than Akero Therapeutics. It trades about 0.09 of its potential returns per unit of risk. Akero Therapeutics is currently generating about 0.02 per unit of risk. If you would invest 1,134 in Protagonist Therapeutics on August 31, 2024 and sell it today you would earn a total of 3,361 from holding Protagonist Therapeutics or generate 296.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Protagonist Therapeutics vs. Akero Therapeutics
Performance |
| Timeline |
| Protagonist Therapeutics |
| Akero Therapeutics |
Protagonist Therapeutics and Akero Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Protagonist Therapeutics and Akero Therapeutics
The main advantage of trading using opposite Protagonist Therapeutics and Akero Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Protagonist Therapeutics position performs unexpectedly, Akero 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 Akero Therapeutics will offset losses from the drop in Akero Therapeutics' long position.| Protagonist Therapeutics vs. Revolution Medicines | Protagonist Therapeutics vs. Akero Therapeutics | Protagonist Therapeutics vs. Avidity Biosciences | Protagonist Therapeutics vs. Stoke Therapeutics |
| Akero Therapeutics vs. Terns Pharmaceuticals | Akero Therapeutics vs. Madrigal Pharmaceuticals | Akero Therapeutics vs. Inozyme Pharma | Akero Therapeutics vs. Viking 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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