Correlation Between 60 Degrees and Eterna Therapeutics
Can any of the company-specific risk be diversified away by investing in both 60 Degrees and Eterna Therapeutics 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 60 Degrees and Eterna Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 60 Degrees Pharmaceuticals, and Eterna Therapeutics, you can compare the effects of market volatilities on 60 Degrees and Eterna Therapeutics 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 60 Degrees with a short position of Eterna Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of 60 Degrees and Eterna Therapeutics.
Diversification Opportunities for 60 Degrees and Eterna Therapeutics
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SXTPW and Eterna is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding 60 Degrees Pharmaceuticals, and Eterna Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eterna Therapeutics and 60 Degrees 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 60 Degrees Pharmaceuticals, are associated (or correlated) with Eterna Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eterna Therapeutics has no effect on the direction of 60 Degrees i.e., 60 Degrees and Eterna Therapeutics go up and down completely randomly.
Pair Corralation between 60 Degrees and Eterna Therapeutics
Assuming the 90 days horizon 60 Degrees Pharmaceuticals, is expected to generate 5.25 times more return on investment than Eterna Therapeutics. However, 60 Degrees is 5.25 times more volatile than Eterna Therapeutics. It trades about 0.05 of its potential returns per unit of risk. Eterna Therapeutics is currently generating about -0.49 per unit of risk. If you would invest 3.70 in 60 Degrees Pharmaceuticals, on September 19, 2024 and sell it today you would lose (1.80) from holding 60 Degrees Pharmaceuticals, or give up 48.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 61.9% |
| Values | Daily Returns |
60 Degrees Pharmaceuticals, vs. Eterna Therapeutics
Performance |
| Timeline |
| 60 Degrees Pharmaceu |
| Eterna Therapeutics |
60 Degrees and Eterna Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 60 Degrees and Eterna Therapeutics
The main advantage of trading using opposite 60 Degrees and Eterna Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 60 Degrees position performs unexpectedly, Eterna Therapeutics 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 Eterna Therapeutics will offset losses from the drop in Eterna Therapeutics' long position.The idea behind 60 Degrees Pharmaceuticals, and Eterna Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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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