Correlation Between Shattuck Labs and Armata Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Shattuck Labs and Armata 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 Shattuck Labs and Armata Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shattuck Labs and Armata Pharmaceuticals, you can compare the effects of market volatilities on Shattuck Labs and Armata 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 Shattuck Labs with a short position of Armata Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shattuck Labs and Armata Pharmaceuticals.
Diversification Opportunities for Shattuck Labs and Armata Pharmaceuticals
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shattuck and Armata is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Shattuck Labs and Armata Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armata Pharmaceuticals and Shattuck Labs 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 Shattuck Labs are associated (or correlated) with Armata Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armata Pharmaceuticals has no effect on the direction of Shattuck Labs i.e., Shattuck Labs and Armata Pharmaceuticals go up and down completely randomly.
Pair Corralation between Shattuck Labs and Armata Pharmaceuticals
Given the investment horizon of 90 days Shattuck Labs is expected to generate 1.12 times more return on investment than Armata Pharmaceuticals. However, Shattuck Labs is 1.12 times more volatile than Armata Pharmaceuticals. It trades about 0.0 of its potential returns per unit of risk. Armata Pharmaceuticals is currently generating about -0.01 per unit of risk. If you would invest 131.00 in Shattuck Labs on October 25, 2024 and sell it today you would lose (12.00) from holding Shattuck Labs or give up 9.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shattuck Labs vs. Armata Pharmaceuticals
Performance |
| Timeline |
| Shattuck Labs |
| Armata Pharmaceuticals |
Shattuck Labs and Armata Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shattuck Labs and Armata Pharmaceuticals
The main advantage of trading using opposite Shattuck Labs and Armata Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shattuck Labs position performs unexpectedly, Armata 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 Armata Pharmaceuticals will offset losses from the drop in Armata Pharmaceuticals' long position.| Shattuck Labs vs. C4 Therapeutics | Shattuck Labs vs. Prelude Therapeutics | Shattuck Labs vs. Monte Rosa Therapeutics | Shattuck Labs vs. Foghorn 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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