Correlation Between Relmada Therapeutics and Ikena Oncology
Can any of the company-specific risk be diversified away by investing in both Relmada Therapeutics and Ikena Oncology 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 Relmada Therapeutics and Ikena Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Relmada Therapeutics and Ikena Oncology, you can compare the effects of market volatilities on Relmada Therapeutics and Ikena Oncology 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 Relmada Therapeutics with a short position of Ikena Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Relmada Therapeutics and Ikena Oncology.
Diversification Opportunities for Relmada Therapeutics and Ikena Oncology
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Relmada and Ikena is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Relmada Therapeutics and Ikena Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ikena Oncology and Relmada 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 Relmada Therapeutics are associated (or correlated) with Ikena Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ikena Oncology has no effect on the direction of Relmada Therapeutics i.e., Relmada Therapeutics and Ikena Oncology go up and down completely randomly.
Pair Corralation between Relmada Therapeutics and Ikena Oncology
Given the investment horizon of 90 days Relmada Therapeutics is expected to under-perform the Ikena Oncology. In addition to that, Relmada Therapeutics is 4.69 times more volatile than Ikena Oncology. It trades about -0.12 of its total potential returns per unit of risk. Ikena Oncology is currently generating about -0.07 per unit of volatility. If you would invest 171.00 in Ikena Oncology on November 28, 2024 and sell it today you would lose (31.00) from holding Ikena Oncology or give up 18.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Relmada Therapeutics vs. Ikena Oncology
Performance |
| Timeline |
| Relmada Therapeutics |
| Ikena Oncology |
Relmada Therapeutics and Ikena Oncology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Relmada Therapeutics and Ikena Oncology
The main advantage of trading using opposite Relmada Therapeutics and Ikena Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Relmada Therapeutics position performs unexpectedly, Ikena Oncology 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 Ikena Oncology will offset losses from the drop in Ikena Oncology's long position.| Relmada Therapeutics vs. Cytokinetics | Relmada Therapeutics vs. Edgewise Therapeutics | Relmada Therapeutics vs. Dyne Therapeutics | Relmada Therapeutics vs. Third Harmonic Bio |
| Ikena Oncology vs. Edgewise Therapeutics | Ikena Oncology vs. Design Therapeutics | Ikena Oncology vs. Xilio Development | Ikena Oncology 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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