Correlation Between Vor Biopharma and Stoke Therapeutics
Can any of the company-specific risk be diversified away by investing in both Vor Biopharma and Stoke 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 Vor Biopharma and Stoke Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vor Biopharma and Stoke Therapeutics, you can compare the effects of market volatilities on Vor Biopharma and Stoke 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 Vor Biopharma with a short position of Stoke Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vor Biopharma and Stoke Therapeutics.
Diversification Opportunities for Vor Biopharma and Stoke Therapeutics
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vor and Stoke is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Vor Biopharma and Stoke Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stoke Therapeutics and Vor Biopharma 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 Vor Biopharma are associated (or correlated) with Stoke Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stoke Therapeutics has no effect on the direction of Vor Biopharma i.e., Vor Biopharma and Stoke Therapeutics go up and down completely randomly.
Pair Corralation between Vor Biopharma and Stoke Therapeutics
Considering the 90-day investment horizon Vor Biopharma is expected to generate 1.63 times more return on investment than Stoke Therapeutics. However, Vor Biopharma is 1.63 times more volatile than Stoke Therapeutics. It trades about 0.12 of its potential returns per unit of risk. Stoke Therapeutics is currently generating about -0.04 per unit of risk. If you would invest 73.00 in Vor Biopharma on August 28, 2024 and sell it today you would earn a total of 9.00 from holding Vor Biopharma or generate 12.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vor Biopharma vs. Stoke Therapeutics
Performance |
| Timeline |
| Vor Biopharma |
| Stoke Therapeutics |
Vor Biopharma and Stoke Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vor Biopharma and Stoke Therapeutics
The main advantage of trading using opposite Vor Biopharma and Stoke Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vor Biopharma position performs unexpectedly, Stoke 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 Stoke Therapeutics will offset losses from the drop in Stoke Therapeutics' long position.| Vor Biopharma vs. Monte Rosa Therapeutics | Vor Biopharma vs. Design Therapeutics | Vor Biopharma vs. Erasca Inc | Vor Biopharma vs. Edgewise Therapeutics |
| Stoke Therapeutics vs. Adaptimmune Therapeutics Plc | Stoke Therapeutics vs. Black Diamond Therapeutics | Stoke Therapeutics vs. Relay Therapeutics | Stoke Therapeutics vs. Pliant 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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