Correlation Between Amylyx Pharmaceuticals and Cullinan Oncology

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Can any of the company-specific risk be diversified away by investing in both Amylyx Pharmaceuticals and Cullinan Oncology 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 Amylyx Pharmaceuticals and Cullinan Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amylyx Pharmaceuticals and Cullinan Oncology LLC, you can compare the effects of market volatilities on Amylyx Pharmaceuticals and Cullinan Oncology 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 Amylyx Pharmaceuticals with a short position of Cullinan Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amylyx Pharmaceuticals and Cullinan Oncology.

Diversification Opportunities for Amylyx Pharmaceuticals and Cullinan Oncology

-0.67
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Amylyx and Cullinan is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Amylyx Pharmaceuticals and Cullinan Oncology LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullinan Oncology LLC and Amylyx 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 Amylyx Pharmaceuticals are associated (or correlated) with Cullinan Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullinan Oncology LLC has no effect on the direction of Amylyx Pharmaceuticals i.e., Amylyx Pharmaceuticals and Cullinan Oncology go up and down completely randomly.

Pair Corralation between Amylyx Pharmaceuticals and Cullinan Oncology

Given the investment horizon of 90 days Amylyx Pharmaceuticals is expected to generate 1.89 times more return on investment than Cullinan Oncology. However, Amylyx Pharmaceuticals is 1.89 times more volatile than Cullinan Oncology LLC. It trades about 0.13 of its potential returns per unit of risk. Cullinan Oncology LLC is currently generating about -0.25 per unit of risk. If you would invest  408.00  in Amylyx Pharmaceuticals on August 17, 2024 and sell it today you would earn a total of  68.00  from holding Amylyx Pharmaceuticals or generate 16.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Amylyx Pharmaceuticals  vs.  Cullinan Oncology LLC

 Performance 
       Timeline  
Amylyx Pharmaceuticals 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Amylyx Pharmaceuticals are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating essential indicators, Amylyx Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.
Cullinan Oncology LLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cullinan Oncology LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Amylyx Pharmaceuticals and Cullinan Oncology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amylyx Pharmaceuticals and Cullinan Oncology

The main advantage of trading using opposite Amylyx Pharmaceuticals and Cullinan Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amylyx Pharmaceuticals position performs unexpectedly, Cullinan Oncology 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 Cullinan Oncology will offset losses from the drop in Cullinan Oncology's long position.
The idea behind Amylyx Pharmaceuticals and Cullinan Oncology LLC 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.
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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