Correlation Between Scholar Rock and Shattuck Labs
Can any of the company-specific risk be diversified away by investing in both Scholar Rock and Shattuck Labs 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 Scholar Rock and Shattuck Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scholar Rock Holding and Shattuck Labs, you can compare the effects of market volatilities on Scholar Rock and Shattuck Labs 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 Scholar Rock with a short position of Shattuck Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scholar Rock and Shattuck Labs.
Diversification Opportunities for Scholar Rock and Shattuck Labs
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Scholar and Shattuck is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Scholar Rock Holding and Shattuck Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shattuck Labs and Scholar Rock 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 Scholar Rock Holding are associated (or correlated) with Shattuck Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shattuck Labs has no effect on the direction of Scholar Rock i.e., Scholar Rock and Shattuck Labs go up and down completely randomly.
Pair Corralation between Scholar Rock and Shattuck Labs
Given the investment horizon of 90 days Scholar Rock Holding is expected to generate 3.87 times more return on investment than Shattuck Labs. However, Scholar Rock is 3.87 times more volatile than Shattuck Labs. It trades about 0.05 of its potential returns per unit of risk. Shattuck Labs is currently generating about -0.1 per unit of risk. If you would invest 1,880 in Scholar Rock Holding on August 25, 2024 and sell it today you would earn a total of 1,112 from holding Scholar Rock Holding or generate 59.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scholar Rock Holding vs. Shattuck Labs
Performance |
| Timeline |
| Scholar Rock Holding |
| Shattuck Labs |
Scholar Rock and Shattuck Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scholar Rock and Shattuck Labs
The main advantage of trading using opposite Scholar Rock and Shattuck Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scholar Rock position performs unexpectedly, Shattuck Labs 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 Shattuck Labs will offset losses from the drop in Shattuck Labs' long position.| Scholar Rock vs. Revolution Medicines | Scholar Rock vs. Black Diamond Therapeutics | Scholar Rock vs. Passage Bio | Scholar Rock vs. Monte Rosa Therapeutics |
| Shattuck Labs vs. C4 Therapeutics | Shattuck Labs vs. Eliem Therapeutics | Shattuck Labs vs. Prelude Therapeutics | Shattuck Labs vs. Monte Rosa Therapeutics |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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