Correlation Between Shattuck Labs and Passage Bio
Can any of the company-specific risk be diversified away by investing in both Shattuck Labs and Passage 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 Shattuck Labs and Passage Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shattuck Labs and Passage Bio, you can compare the effects of market volatilities on Shattuck Labs and Passage 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 Shattuck Labs with a short position of Passage Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shattuck Labs and Passage Bio.
Diversification Opportunities for Shattuck Labs and Passage Bio
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shattuck and Passage is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Shattuck Labs and Passage Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Passage Bio 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 Passage Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Passage Bio has no effect on the direction of Shattuck Labs i.e., Shattuck Labs and Passage Bio go up and down completely randomly.
Pair Corralation between Shattuck Labs and Passage Bio
Given the investment horizon of 90 days Shattuck Labs is expected to generate 1.4 times more return on investment than Passage Bio. However, Shattuck Labs is 1.4 times more volatile than Passage Bio. It trades about -0.12 of its potential returns per unit of risk. Passage Bio is currently generating about -0.49 per unit of risk. If you would invest 134.00 in Shattuck Labs on November 4, 2024 and sell it today you would lose (18.00) from holding Shattuck Labs or give up 13.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shattuck Labs vs. Passage Bio
Performance |
| Timeline |
| Shattuck Labs |
| Passage Bio |
Shattuck Labs and Passage Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shattuck Labs and Passage Bio
The main advantage of trading using opposite Shattuck Labs and Passage Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shattuck Labs position performs unexpectedly, Passage 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 Passage Bio will offset losses from the drop in Passage Bio's long position.| Shattuck Labs vs. C4 Therapeutics | Shattuck Labs vs. Prelude Therapeutics | Shattuck Labs vs. Monte Rosa Therapeutics | Shattuck Labs vs. Foghorn Therapeutics |
| Passage Bio vs. Black Diamond Therapeutics | Passage Bio vs. Revolution Medicines | Passage Bio vs. Stoke Therapeutics | Passage Bio vs. Cabaletta Bio |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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