Correlation Between Satsuma Pharmaceuticals and TRACON Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Satsuma Pharmaceuticals and TRACON 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 Satsuma Pharmaceuticals and TRACON Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Satsuma Pharmaceuticals and TRACON Pharmaceuticals, you can compare the effects of market volatilities on Satsuma Pharmaceuticals and TRACON 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 Satsuma Pharmaceuticals with a short position of TRACON Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Satsuma Pharmaceuticals and TRACON Pharmaceuticals.
Diversification Opportunities for Satsuma Pharmaceuticals and TRACON Pharmaceuticals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Satsuma and TRACON is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Satsuma Pharmaceuticals and TRACON Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRACON Pharmaceuticals and Satsuma Pharmaceuticals 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 Satsuma Pharmaceuticals are associated (or correlated) with TRACON Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRACON Pharmaceuticals has no effect on the direction of Satsuma Pharmaceuticals i.e., Satsuma Pharmaceuticals and TRACON Pharmaceuticals go up and down completely randomly.
Pair Corralation between Satsuma Pharmaceuticals and TRACON Pharmaceuticals
Given the investment horizon of 90 days Satsuma Pharmaceuticals is expected to generate 0.8 times more return on investment than TRACON Pharmaceuticals. However, Satsuma Pharmaceuticals is 1.25 times less risky than TRACON Pharmaceuticals. It trades about 0.06 of its potential returns per unit of risk. TRACON Pharmaceuticals is currently generating about -0.04 per unit of risk. If you would invest 86.00 in Satsuma Pharmaceuticals on August 29, 2024 and sell it today you would earn a total of 24.00 from holding Satsuma Pharmaceuticals or generate 27.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 31.97% |
| Values | Daily Returns |
Satsuma Pharmaceuticals vs. TRACON Pharmaceuticals
Performance |
| Timeline |
| Satsuma Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| TRACON Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Satsuma Pharmaceuticals and TRACON Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Satsuma Pharmaceuticals and TRACON Pharmaceuticals
The main advantage of trading using opposite Satsuma Pharmaceuticals and TRACON Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Satsuma Pharmaceuticals position performs unexpectedly, TRACON 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 TRACON Pharmaceuticals will offset losses from the drop in TRACON Pharmaceuticals' long position.| Satsuma Pharmaceuticals vs. Erasca Inc | Satsuma Pharmaceuticals vs. Forte Biosciences | Satsuma Pharmaceuticals vs. SAB Biotherapeutics | Satsuma Pharmaceuticals vs. Senti Biosciences |
| TRACON Pharmaceuticals vs. Rezolute | TRACON Pharmaceuticals vs. XOMA Corp | TRACON Pharmaceuticals vs. Vincerx Pharma | TRACON Pharmaceuticals vs. Histogen |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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