Correlation Between Arcus Biosciences and BioXcel Therapeutics
Can any of the company-specific risk be diversified away by investing in both Arcus Biosciences and BioXcel 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 Arcus Biosciences and BioXcel Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcus Biosciences and BioXcel Therapeutics, you can compare the effects of market volatilities on Arcus Biosciences and BioXcel 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 Arcus Biosciences with a short position of BioXcel Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcus Biosciences and BioXcel Therapeutics.
Diversification Opportunities for Arcus Biosciences and BioXcel Therapeutics
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Arcus and BioXcel is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Arcus Biosciences and BioXcel Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioXcel Therapeutics and Arcus Biosciences 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 Arcus Biosciences are associated (or correlated) with BioXcel Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioXcel Therapeutics has no effect on the direction of Arcus Biosciences i.e., Arcus Biosciences and BioXcel Therapeutics go up and down completely randomly.
Pair Corralation between Arcus Biosciences and BioXcel Therapeutics
Given the investment horizon of 90 days Arcus Biosciences is expected to generate 0.61 times more return on investment than BioXcel Therapeutics. However, Arcus Biosciences is 1.63 times less risky than BioXcel Therapeutics. It trades about -0.04 of its potential returns per unit of risk. BioXcel Therapeutics is currently generating about -0.23 per unit of risk. If you would invest 1,666 in Arcus Biosciences on August 29, 2024 and sell it today you would lose (87.00) from holding Arcus Biosciences or give up 5.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arcus Biosciences vs. BioXcel Therapeutics
Performance |
| Timeline |
| Arcus Biosciences |
| BioXcel Therapeutics |
Arcus Biosciences and BioXcel Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcus Biosciences and BioXcel Therapeutics
The main advantage of trading using opposite Arcus Biosciences and BioXcel Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcus Biosciences position performs unexpectedly, BioXcel 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 BioXcel Therapeutics will offset losses from the drop in BioXcel Therapeutics' long position.| Arcus Biosciences vs. Cullinan Oncology LLC | Arcus Biosciences vs. Annexon | Arcus Biosciences vs. Structure Therapeutics American | Arcus Biosciences vs. Relay Therapeutics |
| BioXcel Therapeutics vs. Terns Pharmaceuticals | BioXcel Therapeutics vs. Amylyx Pharmaceuticals | BioXcel Therapeutics vs. Acumen Pharmaceuticals | BioXcel Therapeutics vs. Inozyme Pharma |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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