Correlation Between Structure Therapeutics and Arcus Biosciences

Can any of the company-specific risk be diversified away by investing in both Structure Therapeutics and Arcus Biosciences 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 Arcus Biosciences 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 Arcus Biosciences, you can compare the effects of market volatilities on Structure Therapeutics and Arcus Biosciences 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 Arcus Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Structure Therapeutics and Arcus Biosciences.

Diversification Opportunities for Structure Therapeutics and Arcus Biosciences

0.45

Correlation Coefficient

Structure Therapeutics  Arcus Biosciences

Very weak diversification

The 3 months correlation between Structure and Arcus is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Structure Therapeutics America and Arcus Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcus Biosciences 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 Arcus Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcus Biosciences has no effect on the direction of Structure Therapeutics i.e., Structure Therapeutics and Arcus Biosciences go up and down completely randomly.

Pair Corralation between Structure Therapeutics and Arcus Biosciences

Given the investment horizon of 90 days Structure Therapeutics American is expected to generate 1.21 times more return on investment than Arcus Biosciences. However, Structure Therapeutics is 1.21 times more volatile than Arcus Biosciences. It trades about 0.04 of its potential returns per unit of risk. Arcus Biosciences is currently generating about 0.04 per unit of risk. If you would invest  2,016  in Structure Therapeutics American on March 9, 2025 and sell it today you would earn a total of  131.00  from holding Structure Therapeutics American or generate 6.5% return on investment over 90 days.

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

Structure Therapeutics America  vs.  Arcus Biosciences

Structure Therapeutics

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Structure Therapeutics American are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating fundamental indicators, Structure Therapeutics reported solid returns over the last few months and may actually be approaching a breakup point.

Arcus Biosciences

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Arcus Biosciences are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Arcus Biosciences may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with Structure Therapeutics and Arcus Biosciences

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

The idea behind Structure Therapeutics American and Arcus Biosciences 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.