Correlation Between Spero Therapeutics and Akari Therapeutics
Can any of the company-specific risk be diversified away by investing in both Spero Therapeutics and Akari 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 Spero Therapeutics and Akari Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spero Therapeutics and Akari Therapeutics PLC, you can compare the effects of market volatilities on Spero Therapeutics and Akari 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 Spero Therapeutics with a short position of Akari Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spero Therapeutics and Akari Therapeutics.
Diversification Opportunities for Spero Therapeutics and Akari Therapeutics
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Spero and Akari is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Spero Therapeutics and Akari Therapeutics PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akari Therapeutics PLC and Spero 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 Spero Therapeutics are associated (or correlated) with Akari Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akari Therapeutics PLC has no effect on the direction of Spero Therapeutics i.e., Spero Therapeutics and Akari Therapeutics go up and down completely randomly.
Pair Corralation between Spero Therapeutics and Akari Therapeutics
Given the investment horizon of 90 days Spero Therapeutics is expected to generate 0.42 times more return on investment than Akari Therapeutics. However, Spero Therapeutics is 2.37 times less risky than Akari Therapeutics. It trades about -0.02 of its potential returns per unit of risk. Akari Therapeutics PLC is currently generating about -0.03 per unit of risk. If you would invest 138.00 in Spero Therapeutics on September 14, 2024 and sell it today you would lose (31.00) from holding Spero Therapeutics or give up 22.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Spero Therapeutics vs. Akari Therapeutics PLC
Performance |
| Timeline |
| Spero Therapeutics |
| Akari Therapeutics PLC |
Spero Therapeutics and Akari Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spero Therapeutics and Akari Therapeutics
The main advantage of trading using opposite Spero Therapeutics and Akari Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spero Therapeutics position performs unexpectedly, Akari 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 Akari Therapeutics will offset losses from the drop in Akari Therapeutics' long position.| Spero Therapeutics vs. Assembly Biosciences | Spero Therapeutics vs. Achilles Therapeutics PLC | Spero Therapeutics vs. Instil Bio | Spero Therapeutics vs. CytomX Therapeutics |
| Akari Therapeutics vs. Armata Pharmaceuticals | Akari Therapeutics vs. Anebulo Pharmaceuticals | Akari Therapeutics vs. Processa Pharmaceuticals | Akari Therapeutics vs. Salarius 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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