Correlation Between Satsuma Pharmaceuticals and Instil Bio
Can any of the company-specific risk be diversified away by investing in both Satsuma Pharmaceuticals and Instil Bio 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 Instil Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Satsuma Pharmaceuticals and Instil Bio, you can compare the effects of market volatilities on Satsuma Pharmaceuticals and Instil Bio 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 Instil Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Satsuma Pharmaceuticals and Instil Bio.
Diversification Opportunities for Satsuma Pharmaceuticals and Instil Bio
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Satsuma and Instil is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Satsuma Pharmaceuticals and Instil Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instil Bio 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 Instil Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instil Bio has no effect on the direction of Satsuma Pharmaceuticals i.e., Satsuma Pharmaceuticals and Instil Bio go up and down completely randomly.
Pair Corralation between Satsuma Pharmaceuticals and Instil Bio
Given the investment horizon of 90 days Satsuma Pharmaceuticals is expected to generate 1.13 times more return on investment than Instil Bio. However, Satsuma Pharmaceuticals is 1.13 times more volatile than Instil Bio. It trades about 0.07 of its potential returns per unit of risk. Instil Bio is currently generating about 0.04 per unit of risk. If you would invest 86.00 in Satsuma Pharmaceuticals on November 2, 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 | Moves Against |
| Strength | Very Weak |
| Accuracy | 16.4% |
| Values | Daily Returns |
Satsuma Pharmaceuticals vs. Instil Bio
Performance |
| Timeline |
| Satsuma Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Instil Bio |
Satsuma Pharmaceuticals and Instil Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Satsuma Pharmaceuticals and Instil Bio
The main advantage of trading using opposite Satsuma Pharmaceuticals and Instil Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Satsuma Pharmaceuticals position performs unexpectedly, Instil Bio 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 Instil Bio will offset losses from the drop in Instil Bio's long position.| Satsuma Pharmaceuticals vs. Erasca Inc | Satsuma Pharmaceuticals vs. Forte Biosciences | Satsuma Pharmaceuticals vs. SAB Biotherapeutics | Satsuma Pharmaceuticals vs. Senti Biosciences |
| Instil Bio vs. Assembly Biosciences | Instil Bio vs. Nuvation Bio | Instil Bio vs. Achilles Therapeutics PLC | Instil Bio vs. NextCure |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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