Correlation Between Stoke Therapeutics and Cytokinetics
Can any of the company-specific risk be diversified away by investing in both Stoke Therapeutics and Cytokinetics 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 Stoke Therapeutics and Cytokinetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stoke Therapeutics and Cytokinetics, you can compare the effects of market volatilities on Stoke Therapeutics and Cytokinetics 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 Stoke Therapeutics with a short position of Cytokinetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stoke Therapeutics and Cytokinetics.
Diversification Opportunities for Stoke Therapeutics and Cytokinetics
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stoke and Cytokinetics is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Stoke Therapeutics and Cytokinetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytokinetics and Stoke 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 Stoke Therapeutics are associated (or correlated) with Cytokinetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytokinetics has no effect on the direction of Stoke Therapeutics i.e., Stoke Therapeutics and Cytokinetics go up and down completely randomly.
Pair Corralation between Stoke Therapeutics and Cytokinetics
Given the investment horizon of 90 days Stoke Therapeutics is expected to generate 1.17 times more return on investment than Cytokinetics. However, Stoke Therapeutics is 1.17 times more volatile than Cytokinetics. It trades about 0.04 of its potential returns per unit of risk. Cytokinetics is currently generating about 0.04 per unit of risk. If you would invest 770.00 in Stoke Therapeutics on August 30, 2024 and sell it today you would earn a total of 421.00 from holding Stoke Therapeutics or generate 54.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stoke Therapeutics vs. Cytokinetics
Performance |
| Timeline |
| Stoke Therapeutics |
| Cytokinetics |
Stoke Therapeutics and Cytokinetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stoke Therapeutics and Cytokinetics
The main advantage of trading using opposite Stoke Therapeutics and Cytokinetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stoke Therapeutics position performs unexpectedly, Cytokinetics 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 Cytokinetics will offset losses from the drop in Cytokinetics' long position.| Stoke Therapeutics vs. Bright Minds Biosciences | Stoke Therapeutics vs. HP Inc | Stoke Therapeutics vs. Intel | Stoke Therapeutics vs. Chevron Corp |
| Cytokinetics vs. Edgewise Therapeutics | Cytokinetics vs. Dyne Therapeutics | Cytokinetics vs. Stoke Therapeutics | Cytokinetics vs. Pliant 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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