Correlation Between Edgewise Therapeutics and PTC Therapeutics

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

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

Diversification Opportunities for Edgewise Therapeutics and PTC Therapeutics

0.04

Correlation Coefficient

Edgewise Therapeutics  PTC Therapeutics

Significant diversification

The 3 months correlation between Edgewise and PTC is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Edgewise Therapeutics and PTC Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTC Therapeutics and Edgewise Therapeutics 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 Edgewise Therapeutics are associated (or correlated) with PTC Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTC Therapeutics has no effect on the direction of Edgewise Therapeutics i.e., Edgewise Therapeutics and PTC Therapeutics go up and down completely randomly.

Pair Corralation between Edgewise Therapeutics and PTC Therapeutics

Given the investment horizon of 90 days Edgewise Therapeutics is expected to under-perform the PTC Therapeutics. In addition to that, Edgewise Therapeutics is 1.13 times more volatile than PTC Therapeutics. It trades about -0.03 of its total potential returns per unit of risk. PTC Therapeutics is currently generating about 0.18 per unit of volatility. If you would invest  4,076  in PTC Therapeutics on May 7, 2025 and sell it today you would earn a total of  1,149  from holding PTC Therapeutics or generate 28.19% return on investment over 90 days.

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

Edgewise Therapeutics  vs.  PTC Therapeutics

Edgewise Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Edgewise Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Edgewise Therapeutics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

PTC Therapeutics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PTC Therapeutics are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, PTC Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Edgewise Therapeutics and PTC Therapeutics

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

The idea behind Edgewise Therapeutics and PTC 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.

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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.