Correlation Between TRACON Pharmaceuticals and In8bio
Can any of the company-specific risk be diversified away by investing in both TRACON Pharmaceuticals and In8bio 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 TRACON Pharmaceuticals and In8bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRACON Pharmaceuticals and In8bio Inc, you can compare the effects of market volatilities on TRACON Pharmaceuticals and In8bio 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 TRACON Pharmaceuticals with a short position of In8bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRACON Pharmaceuticals and In8bio.
Diversification Opportunities for TRACON Pharmaceuticals and In8bio
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TRACON and In8bio is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding TRACON Pharmaceuticals and In8bio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on In8bio Inc and TRACON 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 TRACON Pharmaceuticals are associated (or correlated) with In8bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of In8bio Inc has no effect on the direction of TRACON Pharmaceuticals i.e., TRACON Pharmaceuticals and In8bio go up and down completely randomly.
Pair Corralation between TRACON Pharmaceuticals and In8bio
Given the investment horizon of 90 days TRACON Pharmaceuticals is expected to under-perform the In8bio. In addition to that, TRACON Pharmaceuticals is 1.17 times more volatile than In8bio Inc. It trades about -0.03 of its total potential returns per unit of risk. In8bio Inc is currently generating about -0.03 per unit of volatility. If you would invest 241.00 in In8bio Inc on August 31, 2024 and sell it today you would lose (211.00) from holding In8bio Inc or give up 87.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 71.39% |
| Values | Daily Returns |
TRACON Pharmaceuticals vs. In8bio Inc
Performance |
| Timeline |
| TRACON Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| In8bio Inc |
TRACON Pharmaceuticals and In8bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRACON Pharmaceuticals and In8bio
The main advantage of trading using opposite TRACON Pharmaceuticals and In8bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRACON Pharmaceuticals position performs unexpectedly, In8bio 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 In8bio will offset losses from the drop in In8bio's long position.| TRACON Pharmaceuticals vs. Rezolute | TRACON Pharmaceuticals vs. XOMA Corp | TRACON Pharmaceuticals vs. Vincerx Pharma | TRACON Pharmaceuticals vs. Histogen |
| In8bio vs. Cue Biopharma | In8bio vs. Eliem Therapeutics | In8bio vs. Inhibrx | In8bio vs. Molecular Partners AG |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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