Correlation Between Solid Biosciences and Connect Biopharma
Can any of the company-specific risk be diversified away by investing in both Solid Biosciences and Connect Biopharma 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 Solid Biosciences and Connect Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solid Biosciences LLC and Connect Biopharma Holdings, you can compare the effects of market volatilities on Solid Biosciences and Connect Biopharma 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 Solid Biosciences with a short position of Connect Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solid Biosciences and Connect Biopharma.
Diversification Opportunities for Solid Biosciences and Connect Biopharma
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Solid and Connect is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Solid Biosciences LLC and Connect Biopharma Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Connect Biopharma and Solid 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 Solid Biosciences LLC are associated (or correlated) with Connect Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Connect Biopharma has no effect on the direction of Solid Biosciences i.e., Solid Biosciences and Connect Biopharma go up and down completely randomly.
Pair Corralation between Solid Biosciences and Connect Biopharma
Given the investment horizon of 90 days Solid Biosciences LLC is expected to generate 0.96 times more return on investment than Connect Biopharma. However, Solid Biosciences LLC is 1.04 times less risky than Connect Biopharma. It trades about 0.03 of its potential returns per unit of risk. Connect Biopharma Holdings is currently generating about -0.23 per unit of risk. If you would invest 583.00 in Solid Biosciences LLC on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Solid Biosciences LLC or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solid Biosciences LLC vs. Connect Biopharma Holdings
Performance |
| Timeline |
| Solid Biosciences LLC |
| Connect Biopharma |
Solid Biosciences and Connect Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solid Biosciences and Connect Biopharma
The main advantage of trading using opposite Solid Biosciences and Connect Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solid Biosciences position performs unexpectedly, Connect Biopharma 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 Connect Biopharma will offset losses from the drop in Connect Biopharma's long position.| Solid Biosciences vs. Century Therapeutics | Solid Biosciences vs. Edgewise Therapeutics | Solid Biosciences vs. C4 Therapeutics | Solid Biosciences vs. Mineralys Therapeutics, Common |
| Connect Biopharma vs. Assembly Biosciences | Connect Biopharma vs. Instil Bio | Connect Biopharma vs. CytomX Therapeutics | Connect Biopharma vs. Achilles Therapeutics PLC |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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