Correlation Between Sosei Group and Amplia Therapeutics
Can any of the company-specific risk be diversified away by investing in both Sosei Group and Amplia 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 Sosei Group and Amplia Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sosei Group and Amplia Therapeutics Limited, you can compare the effects of market volatilities on Sosei Group and Amplia 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 Sosei Group with a short position of Amplia Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sosei Group and Amplia Therapeutics.
Diversification Opportunities for Sosei Group and Amplia Therapeutics
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sosei and Amplia is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sosei Group and Amplia Therapeutics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplia Therapeutics and Sosei Group 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 Sosei Group are associated (or correlated) with Amplia Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplia Therapeutics has no effect on the direction of Sosei Group i.e., Sosei Group and Amplia Therapeutics go up and down completely randomly.
Pair Corralation between Sosei Group and Amplia Therapeutics
Assuming the 90 days horizon Sosei Group is expected to generate 42.74 times less return on investment than Amplia Therapeutics. But when comparing it to its historical volatility, Sosei Group is 3.9 times less risky than Amplia Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Amplia Therapeutics Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Amplia Therapeutics Limited on September 2, 2024 and sell it today you would earn a total of 1.80 from holding Amplia Therapeutics Limited or generate 45.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sosei Group vs. Amplia Therapeutics Limited
Performance |
| Timeline |
| Sosei Group |
| Amplia Therapeutics |
Sosei Group and Amplia Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sosei Group and Amplia Therapeutics
The main advantage of trading using opposite Sosei Group and Amplia Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sosei Group position performs unexpectedly, Amplia 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 Amplia Therapeutics will offset losses from the drop in Amplia Therapeutics' long position.| Sosei Group vs. Rigel Pharmaceuticals | Sosei Group vs. Geron | Sosei Group vs. Verastem | Sosei Group vs. Immutep Ltd ADR |
| Amplia Therapeutics vs. Rigel Pharmaceuticals | Amplia Therapeutics vs. Geron | Amplia Therapeutics vs. Verastem | Amplia Therapeutics vs. Immutep Ltd ADR |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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