Correlation Between Spero Therapeutics and Mustang Bio
Can any of the company-specific risk be diversified away by investing in both Spero Therapeutics and Mustang Bio 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 Mustang Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spero Therapeutics and Mustang Bio, you can compare the effects of market volatilities on Spero Therapeutics and Mustang Bio 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 Mustang Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spero Therapeutics and Mustang Bio.
Diversification Opportunities for Spero Therapeutics and Mustang Bio
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Spero and Mustang is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Spero Therapeutics and Mustang Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mustang Bio 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 Mustang Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mustang Bio has no effect on the direction of Spero Therapeutics i.e., Spero Therapeutics and Mustang Bio go up and down completely randomly.
Pair Corralation between Spero Therapeutics and Mustang Bio
Given the investment horizon of 90 days Spero Therapeutics is expected to under-perform the Mustang Bio. But the stock apears to be less risky and, when comparing its historical volatility, Spero Therapeutics is 7.59 times less risky than Mustang Bio. The stock trades about -0.02 of its potential returns per unit of risk. The Mustang Bio is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 837.00 in Mustang Bio on August 31, 2024 and sell it today you would lose (818.00) from holding Mustang Bio or give up 97.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Spero Therapeutics vs. Mustang Bio
Performance |
| Timeline |
| Spero Therapeutics |
| Mustang Bio |
Spero Therapeutics and Mustang Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spero Therapeutics and Mustang Bio
The main advantage of trading using opposite Spero Therapeutics and Mustang Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spero Therapeutics position performs unexpectedly, Mustang Bio 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 Mustang Bio will offset losses from the drop in Mustang Bio's long position.| Spero Therapeutics vs. Assembly Biosciences | Spero Therapeutics vs. Achilles Therapeutics PLC | Spero Therapeutics vs. Instil Bio | Spero Therapeutics vs. CytomX Therapeutics |
| Mustang Bio vs. Checkpoint Therapeutics | Mustang Bio vs. Reviva Pharmaceuticals Holdings | Mustang Bio vs. Fortress Biotech Pref | Mustang Bio vs. Kodiak Sciences |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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