Correlation Between Cassava Sciences and BioXcel Therapeutics
Can any of the company-specific risk be diversified away by investing in both Cassava Sciences 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 Cassava Sciences and BioXcel Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cassava Sciences and BioXcel Therapeutics, you can compare the effects of market volatilities on Cassava Sciences 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 Cassava Sciences with a short position of BioXcel Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cassava Sciences and BioXcel Therapeutics.
Diversification Opportunities for Cassava Sciences and BioXcel Therapeutics
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cassava and BioXcel is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Cassava Sciences and BioXcel Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioXcel Therapeutics and Cassava Sciences 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 Cassava Sciences 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 Cassava Sciences i.e., Cassava Sciences and BioXcel Therapeutics go up and down completely randomly.
Pair Corralation between Cassava Sciences and BioXcel Therapeutics
Given the investment horizon of 90 days Cassava Sciences is expected to generate 1.1 times more return on investment than BioXcel Therapeutics. However, Cassava Sciences is 1.1 times more volatile than BioXcel Therapeutics. It trades about 0.05 of its potential returns per unit of risk. BioXcel Therapeutics is currently generating about -0.09 per unit of risk. If you would invest 2,083 in Cassava Sciences on August 26, 2024 and sell it today you would earn a total of 565.00 from holding Cassava Sciences or generate 27.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cassava Sciences vs. BioXcel Therapeutics
Performance |
| Timeline |
| Cassava Sciences |
| BioXcel Therapeutics |
Cassava Sciences and BioXcel Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cassava Sciences and BioXcel Therapeutics
The main advantage of trading using opposite Cassava Sciences and BioXcel Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cassava Sciences 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.| Cassava Sciences vs. Annovis Bio | Cassava Sciences vs. Axsome Therapeutics | Cassava Sciences vs. Reviva Pharmaceuticals Holdings | Cassava Sciences vs. Seres Therapeutics |
| BioXcel Therapeutics vs. Eliem Therapeutics | BioXcel Therapeutics vs. HCW Biologics | BioXcel Therapeutics vs. Scpharmaceuticals | BioXcel Therapeutics vs. Milestone 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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