Correlation Between Third Harmonic and Passage Bio
Can any of the company-specific risk be diversified away by investing in both Third Harmonic 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 Third Harmonic and Passage Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Third Harmonic Bio and Passage Bio, you can compare the effects of market volatilities on Third Harmonic 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 Third Harmonic with a short position of Passage Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Third Harmonic and Passage Bio.
Diversification Opportunities for Third Harmonic and Passage Bio
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Third and Passage is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Third Harmonic Bio and Passage Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Passage Bio and Third Harmonic 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 Third Harmonic Bio 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 Third Harmonic i.e., Third Harmonic and Passage Bio go up and down completely randomly.
Pair Corralation between Third Harmonic and Passage Bio
Given the investment horizon of 90 days Third Harmonic Bio is expected to under-perform the Passage Bio. But the stock apears to be less risky and, when comparing its historical volatility, Third Harmonic Bio is 2.75 times less risky than Passage Bio. The stock trades about -0.03 of its potential returns per unit of risk. The Passage Bio is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 62.00 in Passage Bio on September 1, 2024 and sell it today you would earn a total of 51.00 from holding Passage Bio or generate 82.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Third Harmonic Bio vs. Passage Bio
Performance |
| Timeline |
| Third Harmonic Bio |
| Passage Bio |
Third Harmonic and Passage Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Third Harmonic and Passage Bio
The main advantage of trading using opposite Third Harmonic and Passage Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Third Harmonic 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.| Third Harmonic vs. Sensei Biotherapeutics | Third Harmonic vs. NextCure | Third Harmonic vs. Nuvation Bio | Third Harmonic vs. Cullinan Oncology LLC |
| Passage Bio vs. Tff Pharmaceuticals | Passage Bio vs. Eliem Therapeutics | Passage Bio vs. Inhibrx | Passage Bio vs. Enliven 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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