Correlation Between Stoke Therapeutics and 4D Molecular
Can any of the company-specific risk be diversified away by investing in both Stoke Therapeutics and 4D Molecular 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 4D Molecular into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stoke Therapeutics and 4D Molecular Therapeutics, you can compare the effects of market volatilities on Stoke Therapeutics and 4D Molecular 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 4D Molecular. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stoke Therapeutics and 4D Molecular.
Diversification Opportunities for Stoke Therapeutics and 4D Molecular
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stoke and FDMT is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Stoke Therapeutics and 4D Molecular Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4D Molecular Therapeutics 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 4D Molecular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4D Molecular Therapeutics has no effect on the direction of Stoke Therapeutics i.e., Stoke Therapeutics and 4D Molecular go up and down completely randomly.
Pair Corralation between Stoke Therapeutics and 4D Molecular
Given the investment horizon of 90 days Stoke Therapeutics is expected to generate 0.98 times more return on investment than 4D Molecular. However, Stoke Therapeutics is 1.02 times less risky than 4D Molecular. It trades about 0.03 of its potential returns per unit of risk. 4D Molecular Therapeutics is currently generating about -0.01 per unit of risk. If you would invest 954.00 in Stoke Therapeutics on November 1, 2024 and sell it today you would earn a total of 145.00 from holding Stoke Therapeutics or generate 15.2% 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. 4D Molecular Therapeutics
Performance |
| Timeline |
| Stoke Therapeutics |
| 4D Molecular Therapeutics |
Stoke Therapeutics and 4D Molecular Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stoke Therapeutics and 4D Molecular
The main advantage of trading using opposite Stoke Therapeutics and 4D Molecular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stoke Therapeutics position performs unexpectedly, 4D Molecular 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 4D Molecular will offset losses from the drop in 4D Molecular's long position.| Stoke Therapeutics vs. Surrozen | Stoke Therapeutics vs. Armata Pharmaceuticals | Stoke Therapeutics vs. Pasithea Therapeutics Corp | Stoke Therapeutics vs. Aditxt Inc |
| 4D Molecular vs. Revolution Medicines | 4D Molecular vs. Black Diamond Therapeutics | 4D Molecular vs. Passage Bio | 4D Molecular vs. Century 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |