Correlation Between Bolt Biotherapeutics and Instil Bio

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

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

Diversification Opportunities for Bolt Biotherapeutics and Instil Bio

0.83

Correlation Coefficient

Bolt Biotherapeutics  Instil Bio

Very poor diversification

The 3 months correlation between Bolt and Instil is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bolt Biotherapeutics and Instil Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instil Bio and Bolt Biotherapeutics 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 Bolt Biotherapeutics are associated (or correlated) with Instil Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instil Bio has no effect on the direction of Bolt Biotherapeutics i.e., Bolt Biotherapeutics and Instil Bio go up and down completely randomly.

Pair Corralation between Bolt Biotherapeutics and Instil Bio

Given the investment horizon of 90 days Bolt Biotherapeutics is expected to under-perform the Instil Bio. But the stock apears to be less risky and, when comparing its historical volatility, Bolt Biotherapeutics is 1.61 times less risky than Instil Bio. The stock trades about -0.07 of its potential returns per unit of risk. The Instil Bio is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2,429  in Instil Bio on January 25, 2025 and sell it today you would lose (468.00) from holding Instil Bio or give up 19.27% of portfolio value over 90 days.

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

Bolt Biotherapeutics  vs.  Instil Bio

Bolt Biotherapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bolt Biotherapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Instil Bio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Instil Bio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Instil Bio is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Bolt Biotherapeutics and Instil Bio

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

The idea behind Bolt Biotherapeutics and Instil 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.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.