Correlation Between Assembly Biosciences and Mink Therapeutics

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

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

Diversification Opportunities for Assembly Biosciences and Mink Therapeutics

-0.51

Correlation Coefficient

Assembly Biosciences  Mink Therapeutics

Excellent diversification

The 3 months correlation between Assembly and Mink is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Assembly Biosciences and Mink Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mink Therapeutics and Assembly Biosciences 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 Assembly Biosciences are associated (or correlated) with Mink Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mink Therapeutics has no effect on the direction of Assembly Biosciences i.e., Assembly Biosciences and Mink Therapeutics go up and down completely randomly.

Pair Corralation between Assembly Biosciences and Mink Therapeutics

Given the investment horizon of 90 days Assembly Biosciences is expected to generate 0.84 times more return on investment than Mink Therapeutics. However, Assembly Biosciences is 1.19 times less risky than Mink Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Mink Therapeutics is currently generating about -0.01 per unit of risk. If you would invest  1,968  in Assembly Biosciences on July 21, 2024 and sell it today you would lose (144.00) from holding Assembly Biosciences or give up 7.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Assembly Biosciences  vs.  Mink Therapeutics

Assembly Biosciences

Risk-Adjusted Performance

6 of 100

Modest

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

Mink Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mink Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's forward-looking signals remain comparatively stable which may send shares a bit higher in November 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Assembly Biosciences and Mink Therapeutics

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

The idea behind Assembly Biosciences and Mink Therapeutics 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.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.