Correlation Between Spero Therapeutics and Hookipa Pharma
Can any of the company-specific risk be diversified away by investing in both Spero Therapeutics and Hookipa Pharma 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 Hookipa Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spero Therapeutics and Hookipa Pharma, you can compare the effects of market volatilities on Spero Therapeutics and Hookipa Pharma 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 Hookipa Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spero Therapeutics and Hookipa Pharma.
Diversification Opportunities for Spero Therapeutics and Hookipa Pharma
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Spero and Hookipa is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Spero Therapeutics and Hookipa Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hookipa Pharma 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 Hookipa Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hookipa Pharma has no effect on the direction of Spero Therapeutics i.e., Spero Therapeutics and Hookipa Pharma go up and down completely randomly.
Pair Corralation between Spero Therapeutics and Hookipa Pharma
Given the investment horizon of 90 days Spero Therapeutics is expected to generate 0.71 times more return on investment than Hookipa Pharma. However, Spero Therapeutics is 1.41 times less risky than Hookipa Pharma. It trades about -0.15 of its potential returns per unit of risk. Hookipa Pharma is currently generating about -0.49 per unit of risk. If you would invest 129.00 in Spero Therapeutics on August 28, 2024 and sell it today you would lose (14.00) from holding Spero Therapeutics or give up 10.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spero Therapeutics vs. Hookipa Pharma
Performance |
| Timeline |
| Spero Therapeutics |
| Hookipa Pharma |
Spero Therapeutics and Hookipa Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spero Therapeutics and Hookipa Pharma
The main advantage of trading using opposite Spero Therapeutics and Hookipa Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spero Therapeutics position performs unexpectedly, Hookipa Pharma 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 Hookipa Pharma will offset losses from the drop in Hookipa Pharma's long position.| Spero Therapeutics vs. Assembly Biosciences | Spero Therapeutics vs. Achilles Therapeutics PLC | Spero Therapeutics vs. Instil Bio | Spero Therapeutics vs. CytomX Therapeutics |
| Hookipa Pharma vs. Mereo BioPharma Group | Hookipa Pharma vs. Terns Pharmaceuticals | Hookipa Pharma vs. PDS Biotechnology Corp | Hookipa Pharma vs. Inozyme Pharma |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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