Correlation Between AnaptysBio and Q32 Bio

Can any of the company-specific risk be diversified away by investing in both AnaptysBio and Q32 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 AnaptysBio and Q32 Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AnaptysBio and Q32 Bio, you can compare the effects of market volatilities on AnaptysBio and Q32 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 AnaptysBio with a short position of Q32 Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of AnaptysBio and Q32 Bio.

Diversification Opportunities for AnaptysBio and Q32 Bio

0.63

Correlation Coefficient

AnaptysBio  Q32 Bio

Poor diversification

The 3 months correlation between AnaptysBio and Q32 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding AnaptysBio and Q32 Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Q32 Bio and AnaptysBio 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 AnaptysBio are associated (or correlated) with Q32 Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Q32 Bio has no effect on the direction of AnaptysBio i.e., AnaptysBio and Q32 Bio go up and down completely randomly.

Pair Corralation between AnaptysBio and Q32 Bio

Given the investment horizon of 90 days AnaptysBio is expected to generate 3.55 times less return on investment than Q32 Bio. But when comparing it to its historical volatility, AnaptysBio is 5.19 times less risky than Q32 Bio. It trades about 0.12 of its potential returns per unit of risk. Q32 Bio is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  154.00  in Q32 Bio on May 6, 2025 and sell it today you would earn a total of  46.00  from holding Q32 Bio or generate 29.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

AnaptysBio  vs.  Q32 Bio

AnaptysBio

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AnaptysBio are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, AnaptysBio sustained solid returns over the last few months and may actually be approaching a breakup point.

Q32 Bio

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Q32 Bio are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Q32 Bio sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AnaptysBio and Q32 Bio

The main advantage of trading using opposite AnaptysBio and Q32 Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AnaptysBio position performs unexpectedly, Q32 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 Q32 Bio will offset losses from the drop in Q32 Bio's long position.

The idea behind AnaptysBio and Q32 Bio 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.