Correlation Between Structure Therapeutics and IO Biotech

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

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

Diversification Opportunities for Structure Therapeutics and IO Biotech

-0.86

Correlation Coefficient

Structure Therapeutics  IO Biotech

Pay attention - limited upside

The 3 months correlation between Structure and IOBT is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Structure Therapeutics America and IO Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IO Biotech and Structure 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 Structure Therapeutics American are associated (or correlated) with IO Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IO Biotech has no effect on the direction of Structure Therapeutics i.e., Structure Therapeutics and IO Biotech go up and down completely randomly.

Pair Corralation between Structure Therapeutics and IO Biotech

Given the investment horizon of 90 days Structure Therapeutics American is expected to under-perform the IO Biotech. But the stock apears to be less risky and, when comparing its historical volatility, Structure Therapeutics American is 2.21 times less risky than IO Biotech. The stock trades about -0.27 of its potential returns per unit of risk. The IO Biotech is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  99.00  in IO Biotech on May 7, 2025 and sell it today you would earn a total of  116.00  from holding IO Biotech or generate 117.17% return on investment over 90 days.

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

Structure Therapeutics America  vs.  IO Biotech

Structure Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Structure Therapeutics American has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in September 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

IO Biotech

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in IO Biotech are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating fundamental drivers, IO Biotech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Structure Therapeutics and IO Biotech

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

The idea behind Structure Therapeutics American and IO Biotech 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 Anywhere module to track or share privately all of your investments from the convenience of any device.