Correlation Between Stoke Therapeutics and Milestone Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Stoke Therapeutics and Milestone Pharmaceuticals 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 Milestone Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stoke Therapeutics and Milestone Pharmaceuticals, you can compare the effects of market volatilities on Stoke Therapeutics and Milestone Pharmaceuticals 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 Milestone Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stoke Therapeutics and Milestone Pharmaceuticals.
Diversification Opportunities for Stoke Therapeutics and Milestone Pharmaceuticals
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stoke and Milestone is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Stoke Therapeutics and Milestone Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Milestone Pharmaceuticals 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 Milestone Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Milestone Pharmaceuticals has no effect on the direction of Stoke Therapeutics i.e., Stoke Therapeutics and Milestone Pharmaceuticals go up and down completely randomly.
Pair Corralation between Stoke Therapeutics and Milestone Pharmaceuticals
Given the investment horizon of 90 days Stoke Therapeutics is expected to generate 1.34 times more return on investment than Milestone Pharmaceuticals. However, Stoke Therapeutics is 1.34 times more volatile than Milestone Pharmaceuticals. It trades about 0.04 of its potential returns per unit of risk. Milestone Pharmaceuticals is currently generating about -0.01 per unit of risk. If you would invest 830.00 in Stoke Therapeutics on September 3, 2024 and sell it today you would earn a total of 381.00 from holding Stoke Therapeutics or generate 45.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stoke Therapeutics vs. Milestone Pharmaceuticals
Performance |
| Timeline |
| Stoke Therapeutics |
| Milestone Pharmaceuticals |
Stoke Therapeutics and Milestone Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stoke Therapeutics and Milestone Pharmaceuticals
The main advantage of trading using opposite Stoke Therapeutics and Milestone Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stoke Therapeutics position performs unexpectedly, Milestone Pharmaceuticals 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 Milestone Pharmaceuticals will offset losses from the drop in Milestone Pharmaceuticals' long position.| Stoke Therapeutics vs. DiaMedica Therapeutics | Stoke Therapeutics vs. Lyra Therapeutics | Stoke Therapeutics vs. Centessa Pharmaceuticals PLC |
| Milestone Pharmaceuticals vs. DiaMedica Therapeutics | Milestone Pharmaceuticals vs. Lyra Therapeutics | Milestone Pharmaceuticals vs. Centessa Pharmaceuticals PLC |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |