Correlation Between Relay Therapeutics and Affimed NV
Can any of the company-specific risk be diversified away by investing in both Relay Therapeutics and Affimed NV 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 Relay Therapeutics and Affimed NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Relay Therapeutics and Affimed NV, you can compare the effects of market volatilities on Relay Therapeutics and Affimed NV 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 Relay Therapeutics with a short position of Affimed NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Relay Therapeutics and Affimed NV.
Diversification Opportunities for Relay Therapeutics and Affimed NV
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Relay and Affimed is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Relay Therapeutics and Affimed NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affimed NV and Relay 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 Relay Therapeutics are associated (or correlated) with Affimed NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affimed NV has no effect on the direction of Relay Therapeutics i.e., Relay Therapeutics and Affimed NV go up and down completely randomly.
Pair Corralation between Relay Therapeutics and Affimed NV
Given the investment horizon of 90 days Relay Therapeutics is expected to generate 1.7 times more return on investment than Affimed NV. However, Relay Therapeutics is 1.7 times more volatile than Affimed NV. It trades about 0.08 of its potential returns per unit of risk. Affimed NV is currently generating about -0.45 per unit of risk. If you would invest 430.00 in Relay Therapeutics on November 2, 2024 and sell it today you would earn a total of 24.00 from holding Relay Therapeutics or generate 5.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Relay Therapeutics vs. Affimed NV
Performance |
| Timeline |
| Relay Therapeutics |
| Affimed NV |
Relay Therapeutics and Affimed NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Relay Therapeutics and Affimed NV
The main advantage of trading using opposite Relay Therapeutics and Affimed NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Relay Therapeutics position performs unexpectedly, Affimed NV 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 Affimed NV will offset losses from the drop in Affimed NV's long position.| Relay Therapeutics vs. Stoke Therapeutics | Relay Therapeutics vs. Pliant Therapeutics | Relay Therapeutics vs. Black Diamond Therapeutics | Relay Therapeutics vs. Arvinas |
| Affimed NV vs. ADC Therapeutics SA | Affimed NV vs. Agenus Inc | Affimed NV vs. X4 Pharmaceuticals | Affimed NV vs. Terns Pharmaceuticals |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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